European Market Open: EU vaccine shortage starts to bite

• Vaccines take centre stage today, with the UK set to approve one made by Novavax and the EU expected to give the green light to AstraZeneca’s jab.
• EU officials are considering all legal options against vaccine manufacturers to ensure the bloc has enough jabs.  
• In forex, EUR/GBP sinks to its lowest level since May 2020.

FTSE 100 to open lower

The FTSE 100 is set to open 0.7% lower today at 6457.5 from 6506.1 at the end of play yesterday.

European markets to follow

The Euro STOXX Index is called to open 0.8% lower at 3517.5 from 3544.2 at the last close.

France’s CAC 40 is set to open 1.0% lower at 5453.3 from 5507.3 at the end of yesterday’s session.

Germany’s DAX is called to open 0.6% lower today at 13520.0 from 13605.8 at the close on Thursday.

Start trading the opportunities with indices today.

UK regulator to review Novavax vaccine

The UK’s medicines regulator will soon make a decision on whether to approve the Novavax vaccine for use, according to prime minister Boris Johnson, after trials conducted in the UK suggested the drug is 89% effective.

The UK has already ordered 60 million doses of the vaccine and, if approved, it will be produced in Stockton-on-Tees. It would be the fourth vaccine to be approved in the country, with AstraZeneca-Oxford university, Pfizer-BioNTech, and Moderna all having received the green light so far.

UK bans direct flights from the UAE

The UK will ban direct passenger flights to and from the United Arab Emirates on Friday, closing the world’s busiest international airline route between Dubai and London.

Burundi and Rwanda were among other countries to the UK’s travel ban, designed to stop highly-transmissible new variants from spreading.

‘This means people who have been in or transited through these countries will be denied entry, except British, Irish and third country nationals with residence rights who must self-isolate for ten days at home,’ said UK transport secretary Grant Shapps.

EU countries start suffering from vaccine shortages

France, Germany, Spain and Portugal are among EU member states that are starting to see delays in their inoculation programmes as a shortage of vaccine supplies hits the bloc.

Reports from Reuters suggest France has postponed giving people their first jab in Paris and two other regions that together account for one-third of the population. Portugal has also said the roll-out will be slower than first planned, while Germany has warned shortages could continue into April.

Fears are growing quickly in Europe that there isn’t enough vaccine to go around after AstraZeneca warned it would deliver 60% fewer doses to the bloc during the first quarter, while Pfizer has also suffered production problems in Belgium.

EU considers ‘use of all legal means’ to secure vaccine supplies

As tensions between EU leaders and vaccine manufacturers intensifies, the president of the European Commission Charles Michel warned the bloc should consider all its legal options to ensure it can secure the vaccines it needs.

‘If no satisfactory solution can be found, I believe we should explore all options and make use of all legal means and enforcement measures at our disposal under the treaties,’ Michel wrote to a group of EU leaders on January 27.

The EU is expected to outline its plans to increase monitoring of where EU-made vaccines are going today, prompting concerns that this is the first step toward the EU formally blocking manufacturers from exporting vaccines to other countries if it violates existing contracts signed with the EU.

The World Health Organisation’s director of Europe, Hans Kluge, warned countries needed to work together on vaccine shortfalls and said ‘no one is safe before everyone is safe’.

‘The reality is there is a shortage of vaccines... we don’t doubt that manufacturers and producers are working 24-7 to bridge the gaps and we’re confident the delays we are seeing now are going to be made up by extra production in the future,’ Kluge said.

EU to make decision on AstraZeneca vaccine

Notably, the EU has not yet approved the AstraZeneca vaccine for use but is expected to make a decision later today. Formally approving the vaccine will undoubtedly intensify the EU’s demands that AstraZeneca must deliver.

Notably, disagreement seems to be emerging over the effectiveness of the jab. German officials released a draft recommendation yesterday that said there was insufficient data to prove its effectiveness in older people, prompting it to recommend that it is only used in adults under the age of 64.

That prompted questions to the UK, which has already approved the vaccine. UK prime minister Boris Johnson said he does not agree with Germany’s decision. ‘Our own authorities have made it very clear that they think the Oxford AstraZeneca vaccine is very good and efficacious,’ he said.

We could also see the contract signed between the pharma giant and the EU be published if the pair can agree on which sensitive parts of the deal should be redacted, after the EU asked AstraZeneca to make it public after they disagreed over certain aspects of the deal. AstraZeneca has argued the deal is on a ‘best-effort’ basis and does not outline specific timeframes for delivery, a claim EU officials have denied.

Robinhood to restore GameStop trading after tapping banks

Robinhood is expected to restore trading in GameStop and other stocks that have been subject to wild trading patterns this week after it restricted trading in several companies on Thursday, according to the Financial Times.

Robinhood and certain other retail brokers restricted trading in GameStop and other stocks that had seen their share prices surge higher this week, but is expected to restore normal trading today after drawing down several hundred million dollars from a number of banks.

‘We made a tough decision today to temporarily limit buying for certain securities,” Robinhood said late on Thursday. ‘As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearing house deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment.’

It has since said it is looking to ‘open up trading for some of these securities in a responsible manner’.

Our head of research Matt Weller looks at four lessons that have been learnt from the rebellion of small traders against the big boys in the market.

Forex: EUR/GBP sinks to fresh lows

EUR/GBP was trading at 0.88270 this morning – its lowest level since May 2020 - after ending yesterday at 0.88329.

Meanwhile, GBP/USD traded broadly flat at 1.37159 from 1.37210 at the end of play yesterday.

EUR/USD was down slightly in early trade at 1.21069 from 1.21224 at the last close.

Start trading the opportunities in the forex market today.

Commodities: Oil prices hold steady

Brent traded at $55.21 a barrel this morning, slightly higher than $55.15 at the end of yesterday’s session, while WTI edged up to $52.25 from $52.08.

WTI will remain in focus today with the Baker Hughes US oil rig count due at 1800 GMT, providing an insight into drilling activity in the country.

Start trading the volatility in oil prices today.

Gold tradedat $1850 an ounce this morning, up from $1843 at the end of play yesterday.  

Start trading gold and other precious metals today.

Market-moving events in the economic calendar

The economic calendar is light this morning and sees the KOF Swiss leading indicator at 0800 GMT, followed by Germany’s unemployment figures at 0855 GMT.

Attention turns to the US this afternoon, with spending and consumption data to be released at 1330 GMT. The Chicago PMI is due at 1445 GMT and pending home sales and the Michigan consumer sentiment follows at 1500 GMT. The Federal Reserve’s Robert Kaplan, the head of the Dallas Fed, will make two speeches, one at 1800 GMT and another at 2100 GMT. Mary Daly, head of the San Francisco Fed, will follow at 2225 GMT.

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.