Time for a recap
Optimism over the UK’s plans to re-open the economy have sent the pound to a three-year high today, and also driven up travel and property company shares.
Sterling hit $1.42 against the US dollar for the first time since April 2018, and also touched a one-year high of €1.17 against the euro.
Analysts said the UK’s rapid Covid-19 rollout was lifting the pound, alongside a wider move into riskier assets. Capital Economics predicted it could end the year at $1.45.
Shares in holiday firms continued to rebound, with TUI jumping 12% today and cruise operator Carnival gaining 10%. Jet engine maker Rolls-Royce finished the day 5% higher, with commercial property firms British Land (+3.7%) and Land Securities (+4%) also buoyant.
The oil price has surged to new 13-month highs, with Brent crude rising about $67 per barrel. Figures showed a sharp fall in US production last week, and a drop in distillate fuel reserves. This sent shares in BP up over 5% by the close of trading.
Bitcoin has recovered some ground after its slump on Monday and Tuesday. It’s currently trading just below $50,000, up 3.8%, after payments firm Square revealed it had bought more.
The Bank of England governor, Andrew Bailey, has accused the European Union of pursuing a “location policy”, as it puts pressure on banks to move activity from Britain to within the EU.
Bailey told the Treasury Committee that Brussels was wrong to make banks justify justify why they should not have to shift clearing of euro-denominated derivatives worth billions of euros from London to the EU.
“It would be very controversial in my view because legislating extra-territorially is controversial anyway and obviously of dubious legality, frankly.”
“And that would be very controversial, frankly.
Bailey’s US counterpart, Fed chair Jerome Powell, has again reassured Congress – and the markets – that monetary policy will remain loose for some time.
Powell told lawmakers that it may take more than three years to reach the Federal Reserve’s inflation goals.
Stocks pushed higher, with the Dow Jones industrial average hitting a fresh record high — with investors also welcoming the prospect that Johnson & Johnson’s one-shot Covid vaccine could get emergency approval in the US soon.
In other news….
UK companies have warned that Brexi trade delays are worsening:
Heathrow airport has plunged to an annual £2bn loss in 2020, and it wants more government help in 2021:
The pandemic has also encouraged Lloyds Banking Group to reduce its office space by 20% over the next two years, as working from home becomes a permanent lifestyle change.
Investors are turning up the pressure on companies to improve ethnic and gender diversity on their boards ahead of the annual meeting season:
But there is some progress too — the number of female directors at FTSE-100 firms has increased by 50% in the last five years, and women now hold more than a third of roles in the boardrooms of Britain’s top 350 companies.
Goodnight. GW