European Market Open: UK scrambles to contain South African variant

European markets are called to open higher today, as countries try to contain the spread of more transmissible variants of the coronavirus whilst accelerating their vaccination programmes.

Uptrend 3

  • UK is conducting door-to-door tests in eight regions of the country to try and stop the spread of the South African variant of the coronavirus.
  • Germany vows to vaccinate its population by the end of summer, while Japan has warned EU controls on vaccine exports could hit its vaccination programme.
  • Eurozone GDP figures are due out at 1000 GMT this morning.
  • In forex, EUR/GBP trades at its lowest level in 8 months.
  • In commodities, silver prices have fallen back down after rallying to new highs thanks to interest from Reddit-enthused traders.

FTSE 100 to open higher

The FTSE 100 is set to open 0.3% higher today at 6504.5 after ending yesterday at 6486.1.

European markets to follow

The Euro STOXX Index is called to open 0.4% higher at 3555.5 from 3542.3 at the end of play yesterday.

France’s CAC 40 is set to open 0.4% higher at 5507.9 from 5488.8 when markets closed on Monday.

Germany’s DAX is called to open 0.3% higher at 13705.0 from 13664.6 at the last close.

Start trading the opportunities with indices today.

UK health secretary: ‘Need to come down hard’ on South African variant

The UK’s health secretary Matt Hancock has said the country must ‘come down hard’ on the South African variant of the coronavirus as it tries to contain outbreaks in several regions.

Residents in eight areas of the country are undergoing mass door-to-door testing regardless if they are showing symptoms or not in an effort to find the source of the spread after several people were found to have the South African variant despite not having contact with anyone who has recently travelled – sparking fears that it has already spread across the country. The Telegraph reports that this could involve testing 80000 people in total.

‘There’s currently no evidence to suggest this variant is any more severe. But we need to come down on it hard, and we will,’ said Hancock.

Meanwhile, prime minister Boris Johnson has reportedly told ministers to start preparing to reopen schools as the number of coronavirus cases starts to fall thanks to the latest lockdown measures, according to the Telegraph.

Germany vows to vaccine all adults by the end of summer

Meanwhile, over in Europe, German chancellor Angela Merkel has vowed to vaccinate the country’s entire adult population by the end of the third quarter of 2021.

Merkel defended the slow start to the vaccination programme in Germany and in the EU, stating the bloc was keen to give regular approval to vaccines rather than emergency approvals used by other countries like the UK.

Germany is confident it can provide jabs to all its citizens even if a number of vaccines in the pipeline fail to make it to market and despite the fact that supplies will remain tight in the first quarter amid supply shortages across the bloc.  

Will Japan be hit by Europe’s tighter grip on vaccine exports?

Fears are growing in Japan that new vaccine control measures in the EU will impact supplies of jabs to the country as it prepares to begin its vaccination programme this month.

‘The EU has enacted this export transparency mechanism, and it is affecting Japan’s supply schedule,’ warned Taro Kano, the minister in charge of Japan’s vaccination programme, without providing further detail.

Japan has ordered over 500 million doses of various vaccines, enough to easily inoculate its population of 126 million, but all of them are due to come from overseas, making it reliant on the likes of the EU and the US.

Meanwhile, Japan is expected to extend a state of emergency in Tokyo and other parts of the country for another month as it tries to keep on top of the virus ahead of its vaccination programme beginning.

UK chancellor to stick to triple tax lock

UK chancellor Rishi Sunak is expected to stick to the Conservative party’s triple tax lock that pledges not to raise income tax, national insurance or VAT when he unveils his latest budget on March 3, the Financial Times reported.

The unprecedented challenges of the pandemic and the state of the economy had prompted theories that the triple tax lock could be under threat. However, Sunak is thought to be considering raising more money from other forms of taxation – namely corporation and capital gains tax – which has caught the attention of both businesses and financial markets.

The FT suggests corporation tax could be increased from 19% to 23% or 24% by the end of the current parliament.

Income tax, national insurance and VAT account for nearly two-thirds of the UK government’s income, so leaving them alone will limit the chancellor’s ability to balance the books.

UK mortgage approvals rocket in 2020 thanks to stamp duty holiday

Mortgage approvals rocketed to their highest level since 2007 last year as the stamp duty holiday and longer periods at home during the pandemic encouraged people to move. Figures from the Bank of England showed 820000 mortgages were approved in 2020, up from 790000 in 2019.

Notably, 103381 mortgages were approved in December alone as people rushed to finalise deals before the stamp duty holiday expires in March. The value of those mortgages approved in the final month of the year totalled £22.3 billion – the highest monthly total since 1997.

Mortgage approvals were valued at over £171 billion for the year as a whole, hitting its highest level since 2007.

Forex: EUR/GBP hits 8-month low

EUR/GBP was trading slightly lower at 0.88218 – its lowest level since May 2020 - from 0.88268 when markets closed yesterday.

Meanwhile, GBP/USD traded 0.1% higher this morning at 1.36822 from 1.36642 at the end of play yesterday.

EUR/USD was broadly flat this morning at 1.20702 from 1.20603 at the last close.

Start trading the opportunities in the forex market today.

Commodities: Oil gains ground as silver starts to give back gains  

Brent was trading at $56.91 a barrel this morning – its highest level in almost a year - from $56.34 a barrel when markets closed yesterday, while WTI followed higher to $54.11 from $53.50.

WTI will be in play later when the API weekly crude oil stock figures for the week to January 29 is released at 2130 GMT.

Start trading the volatility in oil prices today.

Gold traded at $1854 an ounce this morning, down 0.4% from $1861 at the end of play yesterday.

Notably, movement in gold prices has been partly driven by a surge in interest in silver from Reddit-enthused retail traders target the metal as their next target. Having surged on Thursday, Friday and again on Monday, prices have fallen back from record highs this morning.

Silver traded at $28.30 an ounce this morning, down 2.3% from $29.00 an ounce at yesterday’s close, which marked an eight-year high for the metal which had briefly soared to an 11-year high earlier in the day.

Start trading gold and other precious metals today.

Market-moving events in the economic calendar

The eurozone’s GDP figures for the final quarter of 2020 and for the year as a whole will be released at 1000 GMT. The president of the US Federal Reserve Bank of New York, John Williams, will be giving a speech from 1800 GMT.

Attention then turns to Australia this evening with employment data due out at 2145 GMT alongside figures covering labour and construction.

You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.

More from Indices


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.