MARKETS WEIGH UP VACCINE WARS & CURRENCY WARS The mood in markets has become more ‘risk off’ over the past week. Concerns about the speed of the Covid-19 vaccine rollout, particularly across the EU, has soured the mood. The slow rate of progress across the bloc has led to criticism of producing companies by member governments and threats of restraints on vaccine exports. That, in turn, has fuelled concerns in the UK and the US, both of which have initially made more progress

POSITIVE MARKET SENTIMENT US equity markets reached new highs on expectations that a new Biden administration and Democrat-controlled Congress will lead to significant additional fiscal stimulus. President Biden has proposed an additional $1.9tn on top of the $900bn package passed by Congress late last year. Treasury Secretary nominee and former Fed Chair Janet Yellen urged lawmakers to “act big” on the next fiscal package. There remains some uncertainty, however, on the degr

CONFLICTING SIGNALS Markets have struggled to find direction the week amid a host of conflicting signals. On the one hand, Covid-19 cases and deaths have continued their uptrend across most of the Northern Hemisphere. That has meant that economic growth has slow ed in most economies and, in some cases, it has stalled or even started to slip. On a more positive note, recent economic data are showing that the hits from the most recent lockdowns are far smaller than last spring.