30 November 2020

UK to Start Giving Covid-19 Shots Soon

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News shaping
the markets today

     

What’s happening: Britain secured two million more doses of a covid-19 vaccine from one of the major drug makers.

What happened: With the UK being one of the most impacted countries in Europe by the coronavirus pandemic, which has resulted in over 58,000 deaths, the country is all set to become the first Western country to begin vaccinating its population.

The country’s government has already announced contracts with seven different vaccine manufacturers to buy millions of vaccine doses, with the hope of launching the inoculation program within days of receiving approval, which sent the country’s stocks higher last week.

Why it matters: The UK had imposed a four-week national lockdown to contain the spread of covid-19 in the country. The lockdown is scheduled to end on Wednesday.

Leading US drug maker Moderna recently said that its vaccine candidate showed 94.5% efficacy in preventing covid-19. The company had agreed to supply 5 million doses of its vaccine to the UK. The Department of Health announced that it had raised its vaccine order to 7 million doses. The company’s vaccine will be rolled out after receiving a go-ahead from the UK’s Medicines and Healthcare Products Regulatory Agency.

Britain had also agreed to buy vaccines from two other leading drug makers, including Pfizer, which is developing its vaccine in collaboration with German biotech firm BioNTech, and AstraZeneca, which is manufacturing drug in partnership with Oxford University. The country has ordered 40 million vaccine doses from Pfizer and 100 million from AstraZeneca.

Hospitals in the UK are expected to receive the first doses of the vaccine developed by Pfizer as early as December 7, following its approval. The government is planning to vaccinate its healthcare workers on priority, with people above the age of 80 years to follow.

How stock markets reacted last week: UK stocks closed higher on Friday, with the FTSE 100 index rising by 0.1% to close at 6,367.58. The index ended the week with gains of around 0.3%.

What to watch: With Pfizer and BioNTech reporting their vaccine to be more than 95% effective in preventing covid-19 and expecting to receive approval for the same soon, Britain hopes to apply brakes on the spread of coronavirus. However, the storage issue, which requires the vaccine to be kept at a temperature of about minus 70 degrees Celsius (minus 94 Fahrenheit), will remain a challenge. The purchase of additional doses from Moderna will provide some support to the country’s government. Investors will keep an eye on the response of the UK population to the vaccine and the impact on the reopening of businesses, restaurants and stores in the country.

The Markets Today

     

Crude oil will be in focus today after hitting an eight-month high in the previous session.

Context: Crude oil prices surged to their strongest level since March 2020 on hopes of a quick economic rebound triggered by positive data from covid-19 vaccine manufacturers.

Details: Oil prices had tumbled into negative territory following a sharp decline in energy demand due to the pandemic and other factors like high open interest. However, prices rebounded gradually on optimism around a recovery in the global economy.

Successful vaccine data from various companies, including Pfizer, AstraZeneca, and Moderna, spelt hopes for the oil market. The successful Presidential transition in the US also improved the overall market sentiment.

The OPEC (Organization of the Petroleum Exporting Countries) held its meeting recently with markets expecting a 3-month extension of the existing agreement of output cuts. The prospects of lower supply supporting oil prices also attracted more interest in the commodity.

Investors are also bullish about crude demand on news of a rise in refinery activity in China. The country’s refinery output had climbed to record highs in October.

WTI crude prices jumped above the $46-per-barrel last week, while Brent crude climbed to around $50 per barrel.

What to watch: Investors will be keeping an eye on the OPEC+ (OPEC and its allies) group’s meeting scheduled between November 30 and December 1, which is expected to announced a decision on output cuts for 2021.

Covid-19 continues to remain in focus among traders, with total cases surging past 62.6 million worldwide.

Other Markets: US indices closed higher on Friday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.13%, 0.24% and 2.96%, respectively.

Support & Resistances
for Today

     

market snapshot

     

Futures at 0400 (GMT)

What else to watch today

     

Spain’s consumer price index and current account, Italy’s consumer prices, Germany’s consumer prices, Russia’s money supply M2, Canada's current account, industrial product price index, value of building permits and government budget value as well as the US MNI Chicago business barometer, pending home sales and Federal Reserve Bank of Dallas' general business activity index for manufacturing.

 

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