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Good morning. The U.K. vaccine drive blazes ahead, Trump eludes conviction and Bitcoin tests another milestone. Here’s what’s moving markets.
Milestone
Britain’s Boris Johnson hailed a “significant milestone” as the the country recorded 15 million vaccinations against the coronavirus, cementing a record for delivering one of the most successful immunization programs in the world. More than 25% of the adult population has now received at least one shot. The success has set Johnson up for a tussle with Conservatives in Parliament who want the prime minister to move faster to ease a third national lockdown that has closed schools and shuttered businesses still reeling from the deepest economic slump in more than 300 years. Meanwhile, the University of Oxford is about to start testing its vaccine, co-developed with AstraZeneca, on children.
Acquitted
Former President Donald Trump was acquitted by the Senate Saturday on the charge of inciting the Jan. 6 riot at the Capitol after an unprecedented second impeachment trial that exposed a Republican Party deeply divided over Trump’s conduct and uneasy with his continued role in public life. The vote was 57-43, falling short of the two-thirds majority required for a conviction — but significantly, seven Republicans joined with Democrats and independents in finding Trump guilty on the single impeachment count. Republican Senator Lindsey Graham said Donald Trump remains the party’s “most potent force” even after his second impeachment.
Resistance Tested
Bitcoin reached a new record on Sunday, but retreated before reaching $50,000. The digital token then dropped as much as 6.1% to $45,893, paring its advance so far this year to about 60%. Signs that the financial industry may widen its embrace of Bitcoin had fueled the weekend jump. A week after Tesla announced its $1.5 billion investment in the digital asset, it continues to make inroads into traditional finance, including with news that an investment unit of Morgan Stanley is considering whether to bet on Bitcoin. Canada also approved the first North American Bitcoin exchange-traded fund.
Freeze
Crude oil and natural gas futures continued to rally as an arctic freeze gripping the central U.S. is ratcheting up pressure on global energy prices already trading at unprecedented levels. About 800 daily records for cold temperatures have been set in the past week as Arctic air pushes all the way to the Gulf of Mexico, sending gyrations through energy markets and prompting warnings that rolling blackouts may become necessary in Texas. Watch European energy stocks at the open, as Brent crude oil futures in London rise to their highest level in almost a year.
Coming Up…
European stock futures are pointing to a positive open in the region, mirroring gains in Asian markets. Euro zone industrial production, due in the late morning, is expected to show a decline during December. Most of today’s earnings are expected after markets close, when results are scheduled from French tire giant Michelin, retail landlord Mercialys and cement maker Vicat. Anglo-Australian miner BHP is due even later tonight. U.S. markets are closed for President’s Day, and Chinese ones remain closed through Wednesday for the Lunar New Year.
What We’ve Been Reading
This is what’s caught our eye over the weekend.
And finally, here’s what Cormac Mullen is interested in this morning
A surge in Asian shares Monday briefly pushed the Nikkei 225 past the 30,000 level for the first time since 1990. The gains came amid data showing the Japanese economy grew by double digits last quarter, beating expectations. Sentiment was also boosted by news that Japan — a vaccine laggard — will start inoculations on Wednesday, after finally approving the Pfizer shot. The price-weighted blue-chip gauge has climbed 9% so far this year, while its broader market-cap weighted contemporary the Topix is up about 8%. While not as standout cheap as they once were, Japanese stocks still trade on just 18 times forward earnings compared to 20 times for their global peers and over 22 times in America. Its benchmarks are loaded with cyclical industrials and consumer discretionary shares and come with the added bonus of a central bank who is actively buying stocks. Investors looking for a reflation play who are worried about excessive valuations in other markets could do worse than having Japan on their watchlists.
Cormac Mullen is a cross-asset reporter and editor for Bloomberg News in Tokyo.
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