First Vaccinations Take Place

Risk markets have received a further shot in the arm this week as the global effort to distribute COVID vaccines gets underway. The very first UK citizens have received the Pfizer/BioNTech vaccine which was recently approved by the UK government.

The vaccine, which was given first to a 91 year old woman in the UK, is part of the first 800,000 doses to hit the UK in the coming weeks (amounting to 400,000 vaccinations). The UK is due to receive up to four million doses by the end of the month. With thousands of vaccinations now underway daily in the UK, traders have been given a glimpse of hope that the pandemic can finally be brought to an end as the death toll in the UK this week reached over 62,000.

US Vaccine Hopes

In the US, president-elect Joe Biden has vowed to deliver 100 million vaccinations within the first 100 days of his administration. While Biden acknowledged that such efforts wont bring an end to the pandemic he did say that he aimed to change the course of the virus over his first 100 days in office.

On Tuesday a report carried out by US health authorities confirmed the Pfizer drug to be 95% effective, opening the route to the drug being approved by the FDA on Thursday. Dr Anthony Fauci, the leading US expert on infectious diseases said that the US is aiming to begin mass vaccination in the coming weeks.

President Trump this week attended a COVID vaccination summit at the White House as part of his operation Warp Speed which hopes to deliver up to 24 million vaccinations in the US by mid-January.

UK Mood Lifting

In the UK, the combination of better Brexit news flow following news of a compromise over the Northern Ireland border issue, and the growing optimism around COVID vaccines, is lifting sentiment towards UK assets. The big key to determining near term price action in UK assets over the end of the year will now likely come down to the ongoing Brexit talks which will continue later today between the UK PM and the head of the EC Ursula von der Leyen.

Technical Views

FTSE

The FTSE continues to climb above the 6518.2 level following the break last week. While above here, the outlook remains geared towards higher prices and an eventual move up to the next target at 7025.8 However, momentum studies are flagging bearish divergence here suggesting risks of a pull-back should price retreat back below the 6518.2 level.

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