- U.K. identified a new strain of the Covid-19 virus that is 40-70% more contagious
- Deadlock in Brexit talks
- US Congress reaches deal on $900 bn Covid-19 stimulus package
European indices finished the first session of the week lower amid growing unease over the economic impact of a new more contagious coronavirus strain in Britain. "The new B.1.1.7 ... still appears to have all the human lethality that the original had, but with an increased ability to transmit," said Martin Hibberd, professor of emerging infectious disease at the London School of Hygiene & Tropical Medicine in the Reuters report. Britain has imposed tougher restrictive measures in London and southeast England in an attempt to curb the rapid spread of a new coronavirus strain, while several countries began closing their doors to travelers from the country. Meanwhile, Brexit talks remain in the spotlight as discussions are expected to continue. Lack of progress on a post-Brexit trade deal added to overall concerns as the EU parliament's Sunday midnight 'deadline' passed with no agreement and the British government has ruled out extending the deadline for reaching a post-Brexit trade deal into 2021. On a positive note, European Medicines Agency cleared the usage of Pfizer/BioNTech coronavirus vaccine, paving the way for vaccination to start in the EU. DAX 30 fell 2.8%, CAC40 lost 2.4% and FTSE100 finished 1.79% lower.
US stocks corrected downward sharply as enthusiasm over a coronavirus stimulus package was overwhelmed by news from the U.K. The bill includes direct payments of $600 to all Americans, $300 per week in unemployment benefits through March and $284 billion for the Paycheck Protection Program. Meanwhile Assistant Secretary for Health Adm. Brett Giroir announced that US has no plans to enact a travel ban against the UK as the new variant of the virus has been circulating for some period of time in the UK and it has spread to the US already. The risk-off picture provided a boost to some safe-haven assets. The US dollar, gained across the board, reversing some of its losses in recent weeks. The greenback found some support from a Nikkei report, according to which, the Japanese Prime Minister Yoshihide Suga had told officials to ensure the dollar did not fall below 100 yen. Dow Jones managed to erase early losses and is trading only 0.05%, S&P 500 shed 0.6% and the Nasdaq fell 0.5%. Tesla stock dropped more than 5% after the company officially joined the S&P 500 index.
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Open account Try demo Download mobile app Download mobile appThe rally in crude oil prices went into reverse violently, with futures losing over 5%, after the news from the U.K. cast fresh doubt over the near-term demand outlook. Also Russia is said to continue to back an OPEC+ production hike in February even as the new strain of the virus emerges. Currently WTI trading around $47.0 a barrel and Brent about $50.15 a barrel. Gold is trading at $1880/oz while silver rose 1.7% to 26.21 /oz.
GBPUSD - The British pound managed to erase some of the early losses. Pair bounced off the upward trendline and broke above the resistance at 1.3310 which coincides with 200 SMA (red line). If buyers manage to uphold momentum, the upward move may accelerate towards next resistance at 1.3391. However, if sellers will manage to regain control then another downward impulse towards support at 1.3195 could be launched. Source: xStation5
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