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West Ham 2-0 Leeds United: Hammers up to fifth in table

BBC London News Feed - Mon, 03/08/2021 - 23:46
Midfielder Declan Rice says there is a "real buzz" about West Ham after victory over Leeds maintains their push for a Champions League place.

Testing times: How one firm is trying to solve the return to work riddle

City of London News Stream by Cityam - Mon, 03/08/2021 - 23:00

With light at the end of the Covid-19 tunnel, thoughts are increasingly turning to what the ‘new normal’ might look like. Part of that may well include testing. Stuart MacLennan, CEO of testing firm Circular1 Health, tells City A.M. how they’ve operated testing sites at major manufacturing and military sites since the beginning of the pandemic.

For all the talk of vaccines and herd immunity, it is becoming increasingly clear that monitoring Covid-19 case rates will remain a part of our lives for some time to come. 

So the question is – how to do it?

The debate over mass testing took one step forward and two steps back in the Autumn, and the sad truth is that confusion over what constitutes a reliable way of testing large numbers of people in a short space of time continues to reign. 

But if we are to win the fight, we need to go on the offensive, to cut through the confusion and identify the most reliable methods of testing that will support the economic and financial turnaround.

The somewhat disastrous trial in Liverpool, using lateral flow tests, did little to build confidence in the system. Some 60 per cent of asymptomatic people who actually had the virus went undetected.

This issue of false negatives, and similarly important false positives, is an ongoing concern, but there is no doubt that part of the problem rests with how the tests were conducted.

Read more: Premier League tester to launch Covid testing ‘pods’ at UK offices

While lateral flow testing is quick and easy to perform, and has a very high specificity, these advantages are quickly swept away if the results cannot be relied upon or a mutation of the virus leads to an even greater number of erroneous results.

How we have been addressing the issue in the immediate term is through the development of a different system that combines two methods of testing – LAMP (Loop Mediated Isothermal Amplification) and PCR (Polymerase Chain Reaction) – and conducting both tests in series. 

LAMP/PCR tests provide a very high degree of accuracy (more than 99 per cent). 

The risk of a false positive is extremely rare (1 in 20,000 tests compared with 1 in 200 with lateral flow) and false negatives rarer still. 

Only 0.9 per cent of LAMP/PCR tests will miss the virus compared to anything up to 43 per cent of tests using Lateral Flow.

Through these tests, developed by a British manufacturer, employers have been able to bring their employees safely back to work. 

In certain businesses like the nuclear decommissioning site in Sellafield and others that are of national importance, we have helped them to remain open and operate in a COVID-free environment. At other sites too, like BAE Systems, we have supported the safe return of 5,000 employees to its submarine business in Barrow, delivering a much higher level of confidence to employers and employees alike, as well as helping support the local economy and supply chain.

To put the scale of the challenge into context, we have to date delivered more than 250,000 tests and now have the capacity to deliver more than 100,000 tests every day, anywhere in the country.

Fighting our way out of this pandemic and moving forward into the sunlit uplands means not only having a multi-faceted approach, and offering the broadest range of solutions (including Lateral Flow within a quality assurance framework) but also being multi-faceted in our thinking, and not allowing potential barriers to stand in our way. If sending tests off-site to a laboratory is causing delays, then creating mobile laboratories and having them in situ is the answer, as we have proven. It is a route we are continuing to deploy with multiple customers. 

Read more: Service sector confidence hits 12-month high on UK vaccine rollout

For it is not just in those mission critical areas that we can see mass testing supporting us through the pandemic and beyond. The same theory is also now being applied in the leisure industry, for example, to create safe ‘bubbles’ of passengers and staff to re-invigorate the Cruise sector, or re-open residential holiday and activity centres. 

Given the UK tourism industry is estimated to be valued at £106 billion and support some 3.8 million jobs, the economic and financial imperative is clear for all to see. Recovering even a small percentage of that volume will deliver real economic value, and send a positive message to other industries that a recovery is possible.

This new model known as ‘Test to Operate’ (T2O) – an active combination of testing and screening – will help us take the offensive and get the country open again. The financial support measures introduced by Government – thought to have totalled £280 billion in 2020 – cannot go on indefinitely, and it is incumbent upon businesses like ours to find new ways of helping businesses get back to work and fuel the economic recovery. Confidence is key, which means that a robust testing regime, and the ability to create safe havens for returning employees, will be essential to maintaining the dynamic of the City, and supporting the wider financial and social ecosystem.

We also need to be thinking beyond COVID-19, for example in the wider impact it is having on people’s mental health and wellbeing, and the economic costs this also has in terms of absenteeism in the workplace. Fighting our way through the pandemic means supporting people on the other side, monitoring and tracking trends in their physical and mental state. 

It also means acting responsibly in terms of the environment and seeking ways of limiting the impact that testing products and waste materials will inevitably have on the environment.

Read more: Editorial: Long-term growth worryingly absent in a tax-hiking, business-battering Budget

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Categories: City of London

Chelsea 2-0 Everton: Thomas Tuchel praises Kai Havertz as Blues strengthen top-four hopes

BBC London News Feed - Mon, 03/08/2021 - 22:40
Chelsea manager Thomas Tuchel praises forward Kai Havertz after he plays a vital role as the Blues defeat top-four rivals Everton.

Covid-19: Nightingale hospitals to close from April

BBC London News Feed - Mon, 03/08/2021 - 22:39
The temporary hospitals, which were largely unused, are being shut as patient numbers fall.

Raab demands release of Myanmar leader Aung San Suu Kyi as coup rolls on

City of London News Stream by Cityam - Mon, 03/08/2021 - 20:21

The foreign secretary joined Myanmar’s ambassador to the UK, Kyaw Zwar Minn in urging the release of Aung San Suu Kyi after a military coup ensued the country’s election.

It comes after the military deposed the State-counsellor Suu Kyi on 1 February, declared the November election invalid, and gave power to Commander-in-Chief of Defence Services Min Aung Hlaing.

In a statement, Dominic Raab praised Minn for speaking out against the arrest of Myanmar’s President and condemning the military’s violence.

“I commend the courage and patriotism of Myanmar ambassador Kyaw Zwar Minn in calling for Aung Sung Suu Kyi and President U Win Myint to be released and for the results of the 2020 election to be respected.

“The military regime must end their brutal crackdown, and restore democracy.”

Read more: Saturday Read: Investors are fleeing Myanmar as coup grows more deadly

Earlier today I spoke to Myanmar Ambassador Kyaw Zwar Minn. I praised his courage and patriotism in standing up for what is right. We join his call for the immediate release of Aung San Suu Kyi and President Win Myint, and for a return to democratic rule pic.twitter.com/B7PGhspwL9

— Dominic Raab (@DominicRaab) March 8, 2021

Both Raab and his Myanmar counterpart agreed on a set of positions regarding the crisis. In a statement both parties recognised the need to follow a diplomatic path for solving the crisis, adding that it could only be rectified at the negotiation table.

Additionally, it was also agreed that the Myanmar Embassy in London would remain open for the UK Government and Myanmar to fulfil diplomatic functions on a daily basis.

As law and orderdeteriorated in Myanmar, the UK slapped sanctions on the Asian nation o n18 February. These include the freezing of assets and travel bans against three members of the Burmese military regime.

Read more: Two more killed in Myanmar as protests rumble on

The Foreign Office is advising any British citizens in Myanmar to stay at home as a curfew has been introduced between 8pm and 4am. There are also reports of the internet being shut down and disruptions to phone lines.

As the military has suspended commercial flights until 31 May, the FCO is looking into reparation flights for any stranded brits.

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Categories: City of London

Dutch to lift ban on flights and ferries from UK tomorrow

City of London News Stream by Cityam - Mon, 03/08/2021 - 20:12

The Dutch government will tomorrow lift a travel ban on commercial flights and passenger ferries from the UK, local media reported.

As with many European countries, the Netherlands banned incoming travel from Britain back in January in a bid to prevent the spread of a new, more infectious variant of Covid-19.

Read more: More than a third of the UK has had first dose of Covid-19 vaccine

However, with that variant now the dominant strain in the Netherlands, the ban no longer has a purpose, the Dutch Cabinet has reportedly decided.

In reality, the lifting of the ban will have little impact on travel between the two nations.

Boris Johnson has earmarked 17 May as the earliest date from which international travel for leisure purposes can begin for the UK.

And despite the continued success of the country’s vaccine rollout, Johnson today insisted that the dates set out in his “roadmap” for lifting restrictions would not change.

Before the Open: Get the jump on the markets with our early morning newsletter

As of today, more than 22m people in the UK have received a first dose of a coronavirus vaccine, far outstripping most European countries.

But the news is yet another sign that restrictions are slowly being relaxed across the continent.

Last week the Cypriot government said that it would open to all British citizens who had been vaccinated against Covid-19 from 1 May.

Along with fellow Mediterranean nation Greece, which also depends on tourism, Cyprus has been pushing for a loosening of travel rules so as not to lose out on another summer season.

Read more: North Sea firm NEO Energy snaps up Zennor Petroleum for $625m

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Categories: City of London

More than a third of the UK has had first dose of Covid-19 vaccine

City of London News Stream by Cityam - Mon, 03/08/2021 - 20:06

More than one third of the UK population has received their first dose of a Covid vaccine.

The Department of Health announced more than 22m people have got their first jab. The succesful rollout of the vaccine means that people aged 50 to 59 will start receiving their first dose of the vaccine today, which includes Boris Johnson among others.

So far, more than one million people have also received their second dose of the Covid-19 vaccine.

The vaccine progress has taken a toll on Covid-19 deaths, which dropped to their lowest total in five months.

Read more: Service sector confidence hits 12-month high on UK vaccine rollout

The UK’s Covid-19 daily death toll fell to only 65 yesterday, which is down 34 per cent since last Monday and is the lowest since October 12 when 50 people died.

This brings the total deaths within 28 days of a positive Covid-19 test to 124,566.

Data from the Department of Health also showed that 4,712 people have tested positive for Covid-19 on Monday, up slightly from 3,751 cases last Friday.

The vaccine rollout has increased service sector confidence, which has risen to a 12-month high, according to data compiled by accounting firm BDO.

“The speed of the vaccine rollout across the UK has given businesses a much-needed shot of relief,” said Kaley Crossthwaite, partner at BDO.

“With business lifelines extended in the shape of the prolonged furlough scheme, and an extra dose of support provided to hospitality via extensions in business rates relief and the VAT cut to five per cent, there is reason to believe this optimism can be sustained as we gradually emerge from the depths of lockdown.”

However, OBR committee member Sir Charlie Bean told MPs today that of the £180bn in excess savings Britons have accumulated during Covid-19, only “a relatively small fraction will be leaking into consumer spending”.

Read more: Squeamish ministers must include casual sex exemption in lockdown roadmap

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Categories: City of London

Sarah Everard: Police speak to 'over 750 people' as search continues

BBC London News Feed - Mon, 03/08/2021 - 19:03
More than 100 calls are made to the Met Police as the search for Sarah Everard enters its fifth day.

Lewisham flat fire that killed boy, 5, 'started deliberately'

BBC London News Feed - Mon, 03/08/2021 - 18:38
A five-year-old boy died after a fire in a flat which police say was started deliberately.

Tottenham stabbings: One dead and two injured near White Hart Lane station

BBC London News Feed - Mon, 03/08/2021 - 17:59
Three men have been attacked on Penshurst Road in Tottenham near White Hart Lane train station.

Boris Johnson rules out bringing forward reopening timetable

City of London News Stream by Cityam - Mon, 03/08/2021 - 16:40

Boris Johnson has stressed the need for caution and has ruled out bringing the unlocking timetable forward despite the better-than-expected vaccine rollout.

In a Downing Street conference the Prime Minister stressed the need for a “cautious and irreversible approach”. 

“People would rather trade some urgency and haste in favour of certainty and security about the roadmap dates we’ve set out,” he said. 

Read more: Greensill files for administration putting thousands of steel jobs at risk

On the first day children returned to school Johnson said the risk of rise in infections is “inevitable.” 

“There is a big budget of risk involved in opening schools today in the way that we are – that’s just inevitable,” Johnson said, warning we must be “very, very careful” in the next steps of easing restrictions. 

He added that immunity has “bedded in” for millions of people who have received their vaccine which means it is safe to continue with reopening plans. 

Read more: Fries and Prejudice: Burger King accused of using ‘sexism as clickbait’ in latest tweet

The key factor will be the impact it has on hospitalisations up and down the country which deputy chief medical officer Dr Jenny Harries said would be “considerably less”.

In the past 24 hours 688 patients have been admitted to hospital, bringing the total to 10,898 with 1,542 patients on ventilators.

It comes as figures show more than 22m people have received their first dose of the Covid-19 vaccine, while deaths have fallen to their lowest level since October. 

The post Boris Johnson rules out bringing forward reopening timetable appeared first on CityAM.

Categories: City of London

Belly Mujinga death: 'Virus cough attack' inquest being considered

BBC London News Feed - Mon, 03/08/2021 - 12:43
It comes after Panorama raised questions about the circumstances of the rail company worker's death.

International Women's Day: All-female Met Police team tackle violent crime

BBC London News Feed - Mon, 03/08/2021 - 12:01
Callouts in south London on Saturday night were all managed by women working for the Met Police.

Women's Day: Female leaders speak out as Covid threatens glass ceiling

City of London News Stream by Cityam - Mon, 03/08/2021 - 11:07

As the world comes together to celebrate International Women’s Day, the fight for gender equality enters a defining era.

Today is a celebration of empowerment and inspiration, but tomorrow is even more important.

The recent news that all-male boards had disappeared from the FTSE 350 was a win for diversity, but the economic challenges posed by Covid-19 has put gender equality on a knife-edge.

Research from City & Guilds revealed that the Covid-19 fallout could threaten to set the clock back on progress made towards female empowerment and equality in the workplace.

Campaigners are calling on employers and the government to ensure gender equality does not fall behind by taking active steps such as flexible working policies.

Ann Cairns, executive vice chair of Mastercard, believes Covid-19 has put women in a more vulnerable position.

“Clearly the pandemic has led to a step back in the fight for diversity within business, as a crisis can always lead to the retreat of those who would otherwise strive to make change in times of prosperity,” she said.

“I say differently, and will continue to work with Mastercard to use action rather than words to create more diverse businesses across the globe.”

Read more: Mastercard vice chair: We can’t let Covid crisis hold back female entrepreneurs

There are one million women working in the NHS

If you know one, if you are one, if you work with one, please give them a shout out with the hashtag #OneMillionNHSWomen

Let’s celebrate their courage and their contribution both at work and outside it#InternationalWomensDay pic.twitter.com/NaOpQ35A7A

— NHS Million ???? (@NHSMillion) March 8, 2021 ‘Reach for the stars’

NASA has urged women to “reach for the stars” and wants its latest Mars mission to inspire females to pursue sectors traditionally dominated by men.

Space roboticist Vandi Verma hopes women’s high profile in the Mars venture will ignite further change, but challenges lie ahead.

One in four women have experienced a fall in income over the past year, and more than half have seen their career and mental health deteriorate, according to Fidelity International.

As the firm puts it, the financial challenges of Covid-19 must not be a permanent blow for women and unwind years of progress.

Alexandra Altinger, CEO of J O Hambro Capital Management, urged businesses not to take their foot off the pedal.

“Gender pay gap enforcement may have been delayed due to the pandemic, but the chickens will come home to roost before the year is out,” she said.

“With the pandemic having huge consequences for women in the workforce, businesses will have to act fast to avoid action being taken by the equalities watchdog.”

Read more: Let’s celebrate the number of women on FTSE boards, but smaller companies will face regulatory hurdles if they don’t step up

In her stride, the nation will succeed.#InternationalWomensDay pic.twitter.com/FFtC8KNnzU

— Congress (@INCIndia) March 8, 2021 Pandemic dents female career confidence

New data from the Equal Power campaign, which is working to get more women into politics, showed that action on female representation is needed now more than ever.

The movement found that 74 per cent of women would be unlikely to stand as an MP, compared to 59 per cent before the pandemic.

Three quarters of the women surveyed felt their diverse needs had rarely been represented in the UK during the crisis.

While the pandemic has shifted some attention away from social issues, finding new ways to maximise women’s access to professional development must remain a priority in every sector.

International Women’s Day is an opportunity to highlight the role more flexible approaches can play when it comes to inclusion.

Gender equality wins have been met by unprecedented hardship and the direction of progress is left in the hands of society.

Today acts as a reminder of the importance of tomorrow.

Read more: Four women nab top roles at City watchdog the FCA

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Categories: City of London

City A.M. TV - Daily Market Snapshot (video)

City of London News Stream by Cityam - Mon, 03/08/2021 - 10:53

Rising bond yields and weakness in tech growth stocks has continued to hold back the advance of the global equity market in recent weeks.

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On Friday the US market managed a turnaround in the cash trading session, rallying sharply intraday to close notably higher (e.g. Philly SOX +3.1 per cent, S&P500 +1.9 per cent).

In the UK, the FTSE100 & 250 were both down on Friday. Given the poor past few weeks, markets are now oversold and increasingly fearful. All of which begs the question as to whether this is now a buying opportunity (for traders & investors alike).

Read more: Oil price through the roof following Saudi drone attack

Key events this week include an ECB meeting and monetary policy announcement (Thursday). There will also be a press conference and updated economic projections.

On Wednesday, the global data has an inflation focus with both the US & China releasing their latest consumer price inflation data. Those countries also both release producer price inflation data this week.

Elsewhere the Chinese National People’s Congress is ongoing for the first part of the week, whilst the Chinese key monthly bank lending and money supply data is released this week as well. President Biden is expected to sign the latest stimulus package into law later this week, following its passage through the Senate over the weekend.

Read more: £54bn pandemic export hit: UK losing market share in US, Germany and China

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Categories: City of London

The Week Ahead: ITV, Rolls Royce, Morrison, ECB and UK GDP data

City of London News Stream by Cityam - Mon, 03/08/2021 - 09:44

It’s Monday morning. City A.M. looks ahead at what this week has in store.

China Trade for February

This morning – The Chinese economy finished 2020 on a strong note, its surplus hitting a record high in December. Exports rose by 18.1 per cent, slightly down from November’s 21.1 per cent but still better than expected, and the seventh successive month of growth.

“The strength was primarily as a result of the continued lockdowns in the rest of the world saw the export of PPE and other medical related products do well,” explained Michael Hewson, chief market analyst at CMC Markets UK in London, this morning.

As vaccines continue to get rolled out across the world this trend could well slow in the coming months.

“In the latest trade numbers this week for February the overall numbers will also cover the lead up to Chinese New Year, which could well help boost the imports numbers, given they cover the January period as well,” Hewson shared with City A.M. this morning.

Read more: Investors are fleeing Myanmar as coup grows more deadly

With imports rising 6.5 per cent in December, he thinks it would be “very surprising if we didn’t get a strong number this week,” with expectations of a 15.8 per cent rise.

“This bounce will also be skewed due to the comparison with February last year when the Chinese economy was locked down, due to its own set of coronavirus restrictions. Exports are also set to increase with a 41 per cent rise year on year. The timing of Chinese New Year will also be a factor in this week’s combined numbers for January and February,” he added.

ITV

Tomorrow – When ITV reported its H1 numbers in August both sides of its business were impacted as a result of the various shutdowns of the UK economy, with total advertising revenue for the period declining 21 per cent to £671m, while broadcast revenue dropped 17 per cent to £824m.

ITV Studios, normally an outperformer saw a 17 per cent decline to £630m due to having to pause its production capabilities due to various lockdown measures. In Q3 this deteriorated further on a percentage basis with a 19 per cent decline to £902m.

“Overall, there wasn’t that much to cheer even if advertising trends did improve in July and August, notably with respect to travel companies advertising getaways, and car and indoor furnishing companies boosting ad spend,” commented Hewson.

Read more: ITV shares rise as channel secures Meghan and Harry Oprah interview

“In order to preserve cash, the company pulled its interim dividend while saying it would continue to focus on reducing costs by £60m on a temporary basis, with a view to making around half of those savings permanent,” he shared with City A.M.

In Q3, the picture improved a little as production resumed, albeit with higher costs due to Covid-19 mitigation measures. Advertising trends also improved with total advertising revenue improving slightly to be down 16% in Q3. In terms of the outlook the picture for Q4 was more optimistic with an expectation that advertising revenue would rise by 4 per cent.

“While the return of sport to our screens will have helped boost ITVs advertising revenues in the second half, and Britbox revenues are likely to see an improvement, it is likely to be an uphill struggle for this terrestrial broadcaster unless advertising revenue shows evidence of a sustained pickup,” Hewson noted.

Rolls Royce

Thursday – At one point there was some concern as to whether Rolls Royce would be able to survive the in the wake of the collapse in air travel as a result of the pandemic.

With the company reliant for 50 per cent of its revenue on aviation air miles the company was facing a cash crunch. In October, Rolls Royce shares fell to their lowest levels since 2004, after the the company announced its plans to raise extra cash to bolster its finances.

The launch of a £1bn bond issue as well as a £2bn 10 for 3 rights issue at a 41 per cent discount to 130p was eventually taken up by shareholders, and along with the progress on the vaccine rollout the car giant has seen a decent rebound in the share price, Hewson pointed out.

Read more: Rolls-Royce picks former Deloitte partner Kakoullis as finance chief

“The company still isn’t out of the woods yet announcing that it is likely going to have shut its factories in the summer for two weeks to help stem the losses,” he continued, adding that “at its last trading update the company estimated a free cashflow outflow of £2bn.

This is based on 2021 wide body engine flying hours of 55 per cent of the levels of 2019, with an expectation of turning cash flow positive at the end of the second half of the next fiscal year.

“This seems a touch optimistic, given that air travel is unlikely to be able to return to any semblance of normal this year. And that’s even before allowing for the various cuts to headcount and any planned asset disposals,” Hewson said.

 In 2019, annual revenues came in at £15.45bn, with half of that coming from maintenance and other aftermarket services. Rolls Royce will do well to get anywhere near to half that number for 2020, he added.

Morrison

Thursday – The first week of January generally tends to be a decent bellwether for economic activity over the Christmas and New Year period, and Morrison was quick out of the blocks at the beginning of the year with a rise of 9.3 per cent in like for like sales over the festive period, which augurs well for a decent full year performance.

The digital business has been the main beneficiary over the past 12 months, Hewson stressed, and in the early of its final quarter these saw a rise of 24 per cent, over the same period a year ago, helped largely by the Morrisons on Amazon service, as well as the new relationship with Deliveroo.

Read more: Deliveroo offers share hungry investors access to £50m ahead of IPO

Costs have risen as a result of the pandemic, with Morrisons saying that these are likely to be higher by £50m by the end of the financial year, taking the total cost to £280m for 2020/21, due to the tighter restrictions since December.

Hewson said management still expects pre-tax profit to come in between £420m and £440m, before the £230m deduction in respect of the repayment of business rates for the year 2020/21.

“On a more positive note, Morrisons is also expected to benefit from the decision earlier this month to extend its supply agreement with McColls for a further three years,” he noted.

ECB rate meeting

Thursday –  Over the last 12 months the ECB has really been the only game in town when it comes to supporting the European economy, despite the lack of urgency from EU policymakers in taking fiscal actions of their own, Hewson remarked.

“They’ve not been helped by a weaker US dollar either which recently pushed the Euro up above the 1.2000 level and added to the deflationary pressure on an economy that has tipped back into recession and is unlikely to recover much in terms of its services sector before the second half of 2021, due to tighter lockdown restrictions that have been in place for most of Q4 last year, and look to get extended into Q2 of this year,” he explained.

Hewson called “one saving grace” the performance of the manufacturing sector which appears to be performing well.

To offset the weakness in the services sector which is struggling with various lockdown restrictions the central bank expanded its Pandemic Emergency Asset Purchase program in December for the second time in 2020, from €1.35 trillion to €1.85 trillion, as well as extending it another 9 months until March 2022.

Read more: City Corporation creates new Covid Business Recovery Fund

“While this helps buy time, along with new loan programs in the form of TLTRO’s the ECB can’t act alone given it is already operating at the limits of its mandate. It needs help on a much bigger fiscal scale, which at the moment is only just coming in a fairly limited form in the form of the EU recovery fund, and only €390bn of the €750bn of that fund, in the form of grants, far too low to really make much of a difference,” Hewson said.

“While the ECB has gone to great lengths to insist that their monetary toolbox still has plenty of ammunition to deal with the prospect of a double-dip recession, the rise of the euro and a weaker US dollar is not helping their cause, nor is a sharp rise in borrowing costs, which could cause problems for the like of southern European countries with large debt burdens,” he added.

The huge fiscal stimulus plan in the US is starting to prompt concerns of a sharp rise in real yields which central bankers appear to have been slow in pushing back against.

With the Federal Reserve solely focussed on its role as the US central banker, it appears to have forgotten it is also the world’s central banker. The ripple out effect of the recent sharp rise in yields gives the ECB a real problem in trying to keep a lid on borrowing costs.

“While we are seeing localised measures to address the pandemic, the slow response in rolling out the vaccine in Europe is making life much more perilous for the fragile economies of Spain, Italy and Greece who are in the most economic need. With the damage from the pandemic likely to extend well into 2021, Europe really needs to get its act together, otherwise further economic schisms could open up further over the next 12 months,” Hewson noted.

Read more: Brexit disruption to shave 0.5 per cent off GDP as UK starts its recovery

UK GDP

Friday – Having seen a gain of 1.2 per cent in December, the monthly GDP number for January is likely to be “a sobering affair,” as Hewson puts it, given the tighter measures that were imposed at the beginning of the month.

“Services in particular are expected to take a hammering, and while the UK economy appears to have avoided the dreaded double dip recession, the only unknown about the contraction we’re about to see in the first quarter of 2021 is how big is it likely to be,” he said.

The Bank of England estimates a contraction of 4 per cent for Q1, which seems quite modest given that non-essential retail isn’t expected to return until 12 April. Index of services saw a 1.7 per cent rise in December. This is expected to reverse in the latest numbers for January, Hewson concluded.

Read more: Brexit fuels sharper fall in takeovers by UK investors in continental Europe than worldwide average

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Categories: City of London

Emily Ramsey: West Ham sign Manchester United goalkeeper on emergency loan

BBC London News Feed - Mon, 03/08/2021 - 08:33
West Ham sign Manchester United goalkeeper Emily Ramsey on loan until the end of the season.

Before the Bell: Europe set for positive start despite softness in Asia markets

City of London News Stream by Cityam - Mon, 03/08/2021 - 07:25

No one can complain about a lack of volatility in financial markets at the moment. The tug-of-war between economic recovery and inflation risks continued on Wall Street on Friday and spilt out onto the street in Asia.

Friday’s outsized 379,000 gain in Non-Farm Payrolls caused US yields to spike initially. Still, equity markets just couldn’t keep saying no to the recovery story, and unwound all their ugly intra-day losses to post strong finishes, commented Jeffrey Halley, senior market analyst at OANDA, this morning.

“US 10-year yields peeped their head over 1.60 per cent, before helpfully retreating to 1.55 per cent, aiding the equity recovery story,” he told City A.M. this morning.

The weekend had plenty of interest as well. China’s Balance of Trade exploded higher in Dollar terms to $103.25 billion for JAN-FEB yesterday, Halley pointed out.

“For all the noise about its comparison to Jan-Feb 2020, it flatters to deceive. The same period last year being the start of the Covid-19 economic implosion. Still, given that the number encompasses Lunar New Year, the data is impressive,” he said.

Read more: Biden’s $1.9 trillion Covid stimulus package passed by Congress

The US Senate passed the Biden $1.9 trillion stimulus package over the weekend, which has continued the market sugar rush this morning after equities closed positively on Friday.

“Apart from ditching the minimum wage and tweaking whom is entitled to the fiscal goodies, the bill is relatively intact. It will now pass back to the House tomorrow in its amended form, and then onto President Biden’s desk for signing,” Halley said.

An attempted drone attack on a giant Saudi Arabia oil refinery and transport hub in the Kingdom this morning by the Yemeni Houthis has seen oil prices spike higher once again. No damage was caused, but Brent crude and WTI are 2.5% higher. Brent crude is now well above the $70.00 a barrel mark at $71.30 a barrel.

US payrolls on Friday

Meanwhile, Michael Hewson, chief market analyst at CMC Markets UK, zoomed in on Friday’s payrolls report this morning, as it saw US 10-year yields post a new one year high before slipping back from their peaks, but still closing higher on the day.

“All in all, there was little to find wrong with Friday’s report, the headline number was a huge beat at 379k, while the upward revision in January to 166k, was also very welcome while the unemployment rate also declined to 6.2 per cent,” Hewson shared with City A.M. this morning.

Read more: Number of new jobs in the US smashes expectations with 379,000 roles added in February

The rebound in the US labour market, since the negative number in December appears to suggest that the slowdown in December was just a blip, and when you dig a little deeper into Friday’s report there is plenty of optimism that the current rebound in hiring could well continue into March, he continued.

“This is because the bulk of the rebound in February was driven by the leisure and hospitality sector as businesses started to reopen with a gain of 355k. As the weather warms up and the vaccination program gets rolled out there is plenty of scope for further gains in the coming months,” Hewson noted.

With the Senate also approving the latest $1.9trn stimulus program, the gateway to a successful ratification in Congress, and Presidential approval later this week paves the way for an enormous fiscal boost starting from Q2, and over the rest of the year. The lack of market reaction to this suggests that for the most part this is already priced in.

“The most striking part of the package is a means tested direct payment to most US individuals worth $1,400 per person, along with much more generous unemployment provisions,” Hewson remarked.

While he called all of this “welcome news” for the prospects for a strong economic rebound, it also raises questions about how much further US long term yields can go, in terms of their current move higher.

“One thing seems certain, US long term yields look set to continue to rise with the 1.8 per cent level on the US 10 year the next target, though we could see a pullback to 1.4 per cent first,” Hewson noted.

“US equity markets, even though they managed to undergo a big turnaround on Friday, finishing the day higher, still finished lower for the third week in succession, raising some important questions as to whether we’ve seen a short-term peak, along with the prospect of further downside,” he added.

Read more: AIM outperforms London’s main market during 12 months of Covid-19

The US Federal Reserve certainly doesn’t appear to be expressing any undue concern at the current moves in US bond markets, and why should they, given US 2-year yields remain stubbornly well anchored.

The biggest concern appears to be around inflationary pressures, Hewson continued, which have shown signs of accelerating quite sharply, with Brent crude prices closing the week back above $70 a barrel its highest level in 13 months, and prices paid data at multi year highs.

Look ahead

As we look ahead to the next few days it’s been notable that despite the falls seen in US markets over the last three weeks, European markets have held up fairly well, Hewson observed, with the DAX hitting a record high last week, and UK markets also doing well in the aftermath of last week’s budget.

“This upbeat tone looks set to continue this week with a positive open expected, even though Asia markets have experienced a somewhat more mixed start, despite some fairly decent China trade data for January and February, which showed a big rebound in exports as global demand continues to show resilience,” he said.

Read more: Want to boost UK exports? Help ignored service providers

“Exports surged over 60 per cent from a year ago, and while you can argue that the number is flattered due to the China lockdown a year ago, which shut factories down, the direction of travel still looks impressive,” Hewson pointed out.

Imports also beat expectations, rising over 22 per cent in a sign that domestic demand is also recovering which should bode well for the upcoming retail sales numbers which are due in a week’s time.  

ECB this week

The main focus this week is set to be on the latest meeting of the European Central Bank, and while central bank officials will welcome the recent fall in the value of the euro, “what they won’t welcome is the rise in borrowing costs that has come about as a result of the recent surge higher in global bond yields,” Hewson said.

This has prompted a concern about a tightening of financial conditions which the weaker members of the EU can ill afford. The rise in the US dollar and higher yields could also have consequences for some emerging market countries as well given that some of their liabilities are sensitive to US interest rate fluctuations, he noted.

“What is also troubling some overseas investors is the nature of the EU’s vaccination program, which is well behind its peers, and as such has prompted a net outflow from various European equity funds for three weeks in a row, over concerns that any economic recovery will come too late to rescue the summer season for the likes of the weaker members of the union,” Hewson said.

Losing another summer tourist season is now a real risk for the likes of Italy, Spain and Greece and could see even more vulnerable businesses founder on the back of the pandemic, he concluded.

Read more: Ministers in talks over post-Brexit global services deal

The post Before the Bell: Europe set for positive start despite softness in Asia markets appeared first on CityAM.

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