Markets boosted as Oxford vaccine rollout begins – business live

UK lenders approved 105,000 new mortgages in November, the highest number since the global financial crisis in August 2007.

That was up from 98,300 in October and defied Reuters forecasts for a total 82,500 approvals, according to newly-released Bank of England data.

It comes as home buyers rush to take advantage of the stamp duty holiday, before it comes to an end on 31 March.

However, unsecured lending fell by £1.5bn as borrowers made larger payments on their debts.

It follows a net repayment of £700m in October. The bulk of the repayments were on credit cards.

Households lucky enough not to be hit by job cuts and a loss of income also managed to put more money aside in November. The data shows deposits increased by £17.6bn in November, up from £12.7bn in October.

The FTSE 100 is rallying this morning, up nearly 3% and leading the pack of European peers, which are all still in positive territory.

Though it’s worth keeping in mind that the blue chip index is still roughly 1,000 points below January 2020 levels, before Covid-19 was declared a pandemic.

DATA FLASH: UK manufacturing activity rose to its highest level since November 2017 last month. Manufacturing PMI rose to 57.5 in December compared to 55.6 a month earlier.

A reading above 50 signals expansion.

It came as factories rushed to finish work before the end of the Brexit transition period on 31 December. However, experts warned that those activity levels would not last, so expect weaker readings in the first few months of 2021.

Rob Dobson, director at IHS Markit, which compiles the survey, said:

The manufacturing PMI rose to its highest level in over three years in December, mainly reflecting a boost from last-minute preparations before the end of the Brexit transition period.

Customers, especially those based in the EU, brought forward purchases, boosting sales temporarily.

It seems likely that this boost will reverse in the opening months of 2021, making for a weak start to the year. Note also that the December PMI data were collected prior to the border closures, which will have led to further logistics and production disruptions for many companies.

The pound is losing ground to the euro this morning, falling more than 0.5% to around 1.1126

Not only is the euro gaining on the back of strong manufacturing PMI data, but sterling’s post-Brexit deal rally is facing. The pound jumped in the wake of news that UK and EU officials had struck a last minute trade deal on Christmas Eve.

The euro is also gaining ground against the US dollar, up 1.2% to around 1.2296.

DATA FLASH: Eurozone manufacturing PMI rose to 55.2 in December from 53.8 in November.

It was slightly below flash estimates of 55.5 but is still the highest reading since May 2018. The bloc’s performance was boosted by production activity in Germany, the Netherlands and Ireland.

Chris Williamson, Chief Business Economist at IHS Markit said it was an “encouragingly strong” reading for the sector at the end of the year, with production growth at one of the highest levels in the past three years.

The solid performance of manufacturing amid the tightening of COVID-19 restrictions in the closing months of 2020 represents a major contrast to the lockdowns earlier in the year, with factories acting as a crucial support to the economy as the service sector is hit by tough social distancing measures.

The strong manufacturing growth is thanks to a large extent on booming demand for German goods, which drove most of the increase in eurozone production during December, in turn buoyed by rising exports.

While robust expansions were also seen in the Netherlands and Ireland, these in part reflected a temporary spike in UK demand prior to the end of the Brexit transition period.

Germany’s manufacturing sector, which accounts for around a fifth of its economy, expanded last month, with the PMI rising to 58.3 in December from 57.8 in November.

That was slightly below expectations based on the flash estimate of 58.6. However, it is still the highest reading since February 2018.

Stay tuned for Eurozone readings in just a few minutes’ time.

More manufacturing PMI data, this time from France, has come in at 51.1 for December.

That’s in line with expectations and higher than November’s reading of 49.6.

Correction: French manufacturing PMI was 49.6 in November, not 51.1 (which was the flash reading, not the prior month)

DATA FLASH: Italian manufacturing PMI shows the industry was still in expansion territory last month.

However, the reading has fallen short of expectations, coming in at 52.8 in December versus Reuters forecasts for 53.7.

However, that’s still higher than the 51.5 recorded in November.

DATA FLASH: Spain’s manufacturing sector grew slower than thought in December.

The final reading of manufacturing PMI came in at 51.0, which is lower than analyst expectations for 52.8. However, that is higher than 49.8 recorded in November.

A reading above 50 signals expansion.

Here’s a photo of Brian Pinker – who has become the first person in the world to receive the Oxford/AstraZeneca vaccine – which will undoubtedly be making the rounds on newscasts this morning.

AstraZeneca shares are not among the top risers on the FTSE 100, but the stock is still up 1.7% this morning.

It comes as the first dose of the vaccine it created with Oxford university was given to a patient this morning. It is part of the UK’s larger inoculation efforts:

AstraZeneca has said it will not profit from the vaccine. That pledge has reduced interest from investors who are looking to bet on companies involved in Covid recovery efforts.

Major indexes have had a strong start, all up around 1% at the start of trading:

• FTSE 100 is up 1.4%
• FTSE 250 is up 1%
• Germany’s DAX is up 1.2%
• France’s CAC 40 is up 1.1%
• Spain’s IBEX is up 1.3%

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

A recent rise in Covid cases in countries like the UK, US and Japan, has failed to dampen market enthusiasm on the first full trading day of 2021.

It comes as investors pin their hopes on the distribution of Covid vaccines including the Oxford/AstraZeneca jab, which will start being used in the UK today.

The broadest measure of Asia-Pacific shares (outside Japan) hit an all-time high after rising 1.2% in Monday trading.

Major indexes across Europe are set to follow suit, aided by the fact that Brexit uncertainties – which have been blamed for the bulk of market fluctuations outside of Covid over the past 4.5 years – are now in the rear-view mirror, after the UK formally exited the bloc on New Year’s Eve.

Across the pond, Wall Street is also gearing up for a strong start to the new year with Dow, S&P 500, and Nasdaq futures all rising around 0.3%, hitting new record highs.

We’ll also be keeping a close eye on oil prices, as Opec members meet today. The group of oil producing nations are reportedly mulling a production cap in February to further support prices hit by a drop in demand during the pandemic. The global benchmark, Brent crude, is currently up 2.2% at around $52.94 per barrel.

We’re also expecting confirmation on how the manufacturing sector fared across the UK and mainland Europe in December. China’s own manufacturing PMI data released overnight showed slightly weaker growth, slipping to 53.0 in December versus expectations of a 54.7 reading, and 54.9 in November. That was chalked up to weaker export growth due to modest foreign demand. However, a reading above 50 still signals expansion.

The agenda

• 8.15am GMT: Spanish manufacturing PMI (December, final)
• 8:45-8.55am GMT: Italian, French and German manufacturing PMI (December, final)
• 9.00am GMT: Eurozone manufacturing PMI (December, final)
• 9.30am GMT: UK manufacturing PMI (December, final)
• 9.30am GMT: UK mortgage approvals, net mortgage lending, and consumer credit (November)
• 2.45pm GMT: US manufacturing PMI (December, final)