29/01/2021

Risk sentiment shifts with Pfizer vaccine supply in the spotlight


GBP

Sterling experienced a generally positive week of trade, rising by two-thirds of a percent, as new 8 months highs were experienced against the Euro. There was some trouble mid-week but the pound was able to recover and remains stable as we move into the weekend. Sterling was strengthened further by better than anticipated unemployment data. The UK also still leads the world with its vaccination programme with over 7.4 million people receiving a first dose and more than 470k receiving a second dose. This puts the UK around halfway to meeting the 15million target by mid-February. If this target is met, no doubt, we could see even further sterling strength as it puts us closer to a faster economic recovery compared to our peers.

Finally, there have been a number of reports to suggest that the EU could block the UK’s Pfizer vaccine supply as their feud with AstraZeneca heightens. A leaked letter from Charles Michel, the European Council president reveals Brussels are exploring ‘ urgent measures to ensure effective vaccine production and supply’ for their population. The letter further states they were looking to retain all vaccine supplies, through ‘legal means’ thus restricting the UK’s order and supply. This comes after a statement, by AstraZeneca, indicating supplies would be slowed to the EU due to production problems. Now, whether this will actually take place remains to be seen, but it could spark a greater divide between the recently parted states and should be carefully watched in the coming weeks.

Key announcements

09:00 – EUR – German GDP (QoQ)(q4)
16:00 – USD – Treasury sec nominee Yellen speech


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