Bleak Weak For The UK

It's been a harrowing week for the UK. The PM's U-turn just ahead of the Christmas holidays saw severe disruptions for many as London and parts of the South East were plunged into Tier 4 lockdown, banning the household mixing which had previously been green-lighted for the period. The move was announced in reaction to COVID cases and deaths doubling in the week leading up to Christmas as doctors and scientists identified a new strain of the virus up to 50% more infectious than the original strain. With the UK hitting the 50,000 new cases a day milestone over recent days, there are grave fears over the coming months and the prospect of broader and stricter restrictions being announced.

New Vaccine Approved

However, there has been some cause for optimism today. The government has now approved the Oxford-AstraZeneca vaccine and has ordered 100 million doses, which will be enough to vaccinate 50 million people. Along with the 40 million doses of the Pfizer-BioNTech vaccine, this will be enough to vaccinate the entire population.

So far, around 600,000 people have been vaccinated in the UK with the Pfizer-BioNTech jab. However, the rollout has not been as smooth as expected given that the drug must be stored in an ultra-cool -70c fridge. However, given that the new vaccine can be stored in a regular fridge, the government is hopeful that the rollout can take place at a much quicker pace.

Government To Step Up Vaccination Program

Health officials have warned that the UK needs to vaccinate a minimum of 2 million people per week to stop a third wave occurring. The vaccination campaign will now alter to give as many people as possible their first vaccination jab. The full vaccination requires two jabs, 3 weeks apart. Previously the government has been trying to pass people through both jabs, which is obviously slower and will now focus on giving as many as possible their first jab.

The government is due to review the current social restrictions and lockdown measures in place today and it is widely expected to announce a drastic scaling up of measures, plunging most of the country into Tier 4 with London and other badly affected areas rumoured to be headed for Tier 5 restrictions - equal to those seen during the first lockdowns in March.

Technical Views

FTSE

The FTSE remains well bid on the week. Price continues to hold above the 6518.2 resistance though remains just off the week's highs for now. While price holds above 6518.2, the near term bias remains bullish with a focus on the 7025.8 level next. However, bearish divergence in momentum studies warrants monitoring and any break below 6518.2 could spur a deeper sell off.

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