By Samuel Indyk
Investing.com – The FTSE 100 trades in the red heading towards the North American crossover with little in the way of fresh catalysts to drive near term market direction. The same can be said for other European bourses with most major bourses trading marginally lower. The current situation is dominated by vaccine rollout, ongoing hopes for US fiscal stimulus, the current Covid-19 picture and the how effective the current vaccines are against the new strains.
In the UK, the Covid-19 picture is improving, albeit slowly, and the vaccine rollout has been promising so far. Nevertheless, there are fears that the Oxford/AstraZeneca PLC (LON:AZN) jab is less effective against the South African variant. The director of the Oxford Vaccine Group, Andrew Pollard, spoke to the BBC earlier and tried to reassure people that the vaccine is still effective. “I don’t think there’s any reason for alarm today,” Pollard said.
In individual stocks news, Ocado Group PLC (LON:OCDO) props up the blue-chip index after a trading update pre-market. The technology/grocery delivery company provided strong retail revenue growth but announced total capex is expected to be around £700mln as they build more automated warehouses.
Oil companies are strong with BP PLC (LON:BP) and Royal Dutch Shell PLC Class A (LON:RDSa) higher as energy prices remain elevated. Brent Oil Futures hold firm above $60/barrel although trades off its highest levels ahead of the API’s weekly crude stocks report after market in the US.
The USD is weaker which is providing support for GBP/USD and is looking to test 1.38 to the upside. The GBP earlier hit its highest level against the USD since April 2018, although is weaker against the EUR today. Markets are still pushing back expectations for a rate cut from the Bank of England following the central bank’s announcement last week.
Silver prices continued their strong start to the week with the precious metal up almost 2% to $27.75. Gold is also trading with gains although they are more modest with the yellow metal up around 0.5%.
Bitcoin remains the asset in focus after Tesla Inc (NASDAQ:TSLA) disclosed they own $1.5bln of the cryptocurrency on Monday. The largest cryptocurrency by market cap touched a high above $48,000 but has since pared back to around $46,000 as markets await the next catalyst for a move higher.