Today saw a slow start to FTSE 100 trading with talks of delays in the relaxing of the Covid lockdown rules in the UK in addition to the next round of inflation figures due soon.
It is reported that ministers are becoming more pessimistic about the data around the new strains of the virus.
Sources (allegedly from various cabinet ministers) are possibly to delay removing all lockdown rules for between 2 weeks and 1 month to allow more time for vaccines to be rolled out and view hospitalisation and death data for the latest wave.
A formal announcement next Monday is expected by Boris Johnson after the social distancing review is published ahead of 21st June plan to end social distancing in restaurants and pubs.
The news today could effect leisure and retail shares with concerns around the current timetable.
Markets elsewhere show concern of inflation returning to the US, forcing the Federal Reserve to raise interest rates and later this week data will give markets more direction.
Trading focused on Germany with latest industrial data figures published seeing factory orders decline by 0.2%. Analysts expected a rise of just 0.2% and anything significantly above or below this could impact on the main stock market indices.
The JOLTs survey also saw more job vacancies available in the US with vacancies likely to increase from 8.12 million in March to 8.2 million in April which may also move markets upwards.
US payroll data from last Friday saw 8 million fewer Americans in work now than before the pandemic and it is argued that the two rounds of Covid financial handouts in the US have saved the economy from a far worse plight and eased poverty.
The Financial Times also reported that Britain’s regulation and lack of government support has meant that UK banks were now valued 3.5 times lower than their US and European peers.
There is hope that the Chancellor Rishi Sunak, the Prime Minister PM and Andrew Bailey (Bank of England Governor) will listen to banks and remove the tax surcharge that was put on as punishment for the global financial crisis in 2008/2009.
There was a also 2-week low for bitcoin as it fell nearly 6% to $33,000.
Bloomberg's Galaxy Crypto Index showed a larger fall of 10% for crypto stocks, the cause is unknown but blame is on the US authorities’ recovery of most of the Bitcoin ransom paid to criminals who cyber-attacked the Colonial fuel pipeline last month.
We appear to be in a waiting game although we believe global inflation is on its way and once any initial markets falls are dealth with on initial inflation news, longer term inflation will then push markets even higher. As for covid in the UK, it would appear to make sense to postpone full relaxation of rules until we know more about the current spike through younger people.