09:17 AM
Eurozone activity slows for first time since June
The eurozone’s economic recovery has run out of steam, with new restrictions prompting the first contraction in activity since the start of the summer.
November ‘flash’ purchasing managers’ index readings for the bloc showed its composite reading slipped to 45.1, having been bang on the no change mark of 50 in October.
The readings indicate a continued dovetailing across Europe, with manufacturing growth remaining solid as new restrictions batter services.
Here are the readings (where a score below 50 indicates contraction compared to the previous month):
IHS Markit, which gathered the data, said:
With the exceptions of the declines seen in the first two quarters of this year, the average PMI reading of 47.6 in the fourth quarter so far is the lowest since the closing quarter of 2012 (during the region’s debt crisis) and indicative of a steep decline in GDP.]
The deteriorating performance was broad-based, albeit with the service sector hardest hit from virus containment measures.
Here are some of its key findings:
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Inflows of new orders rose in manufacturing at the slowest rate recorded over the past five months
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Hospitality, travel and consumer-facing companies reported especially weak demand
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Employment fell across the eurozone as a whole for a ninth consecutive month
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The ongoing need to cut employment was again often blamed on the development of spare capacity
IHS Markit’s Chris Williamson said:
The eurozone economy has plunged back into a severe decline in November amid renewed efforts to quash the rising tide of Covid-19 infections. The data add to the likelihood that the euro area will see GDP contract again in the fourth quarter.
The service sector has once again been the hardest hit, especially consumer-facing and hospitality businesses, though weakened demand has also taken a toll on manufacturing.
08:57 AM
Germany factory growth remains strong while services slows
Germany’s manufacturing sector continued to grow strongly in November despite new lockdown restrictions that caused services activity to slow.
Its composite purchasing managers’ index reading cleared the growth threshold of 50, indicating Europe’s biggest economy continued to expand this month.
Here are the ‘flash’ readings (where a score below 50 indicates contraction compared to the previous month):
IHS Markit, which gathered the data, said:
Service providers recorded a marked drop in inflows of new work that was the steepest for six months, which they linked not only to the restrictions on activity, but also hesitancy amongst clients. By contrast, manufacturing order books extended their recent recovery, helped by rising exports sales, albeit with the data highlighting some loss of momentum in the rate of growth.
Here are some of the key findings:
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Flash data pointed to a broad-based increase in firms’ expectations for output in the year ahead
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Flash data showed payroll numbers rising – albeit marginally – for the first time since February
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The slowdown in manufacturing staff cuts was consistent with signs of growing capacity pressures at factories
IHS Markit’s Phil Smith said:
As expected, the introduction of new lockdown measures in November to combat the spread of Covid-19 has had a disruptive impact on German economic activity, with the flash PMI data showing the service sector suffering its worst performance since May.
However, the resilience being exhibited by the manufacturing sector, which the survey shows is benefitting for growing sales to Asia in particular, supports our view that any downturn in the final quarter is expected to be far shallower than those seen in the first half of the year
08:30 AM
France economic slowdown intensifies
A slowdown in France’s private sector grew more intense this month in the face of tightening Covid-19 restrictions.
Purchasing managers’ index results landed below the growth threshold across the board, with the slowdown spreading to the manufacturing sector.
Here are the ‘flash’ readings (where a score below 50 indicates contraction compared to the previous month):
IHS Markit, which gathered the data, said:
Private sector activity fell at the quickest pace since May when similar lockdown restrictions were last in place. At the sub-sector level, November’s decline was predominantly driven by services, where firms recorded a sharper contraction for the second month running. Manufacturers saw production fall for the first time since May, but the rate of reduction was moderate overall.
Here are some of its key findings:
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New orders received by French businesses fell markedly
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Overall demand conditions received little support from international markets
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Private sector firms continued to cut their staff numbers
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Despite employing fewer staff, a decline in new work saw French businesses alleviate backlogs
IHS Markit economist Eliot Kerr said:
With the renewed tightening of restrictions in France at the end of October, a sharp decline in private sector activity during November was almost inevitable. However, it is somewhat positive to see that the latest contraction in activity was substantially slower than during the previous lockdown.
08:17 AM
FTSE rises slightly
European stock markets have opened slightly higher in the wake of this morning’s vaccine news.
08:15 AM
Vodafone commits to net zero by 2040
Telecoms giant Vodafone has committed to reaching ‘net zero’ carbon emissions by 2040.
It aims to eliminate emissions from its own operations and energy purchases within the next decade, and to halve emissions from sources including join ventures and its supply chains by 2030 on the way to net zero.
Chief executive Nick Read said:
We are committed to reduce our carbon footprint through improved energy efficiency, renewable energy supply, reducing our network waste and new environmental criteria when we select suppliers.
08:04 AM
McBridge says trading outlook unchanged
Household goods manufacturer McBride says its trading outlook remains unchanged following a shift in demand patterns prompted by the pandemic.
In a brief trading update ahead of its annual general meeting today, the group said:
The early part of the financial year has experienced demand patterns similar to those seen in the Covid-19 affected last four months of the year ended 30 June 2020. Changes to consumers’ behaviours seen in the earlier stages of the pandemic have largely continued with strong demand for bleach, auto-dish and surface cleaning products offset by lower demand for laundry products.
It said earnings growth is expected to be weighted towards the first half of the year, reflecting weak comparatives from 2019 and improved efficiencies. Despite this, its board kept guidance unchanged, taking a “cautious” stance in view of the pandemic.
07:36 AM
Astra vaccine can be stored in a regular fridge
In positive news, the Astra/Oxford vaccine can be stored at normal refrigerated conditions (two to eight degrees Celsius).
The company said it will “immediately” prepare regulatory submission of the data to authorities around the world “that have a framework in place for conditional or early approval”.
The Government has pre-ordered 100 million doses of the Astra/Oxford vaccine.
07:16 AM
Breaking: AstraZeneca vaccine 70pc effective
AstraZeneca has said its Oxford vaccine has shown an average efficacy of 70pc in clinical trials.
However, when the vaccine was given as a half dose, followed by a full dose at least one month apart, it was 90pc effective.
The company said “no hospitalisations or severe cases of the disease were reported” during the study.
In recent weeks, Pfizer and Moderna said their vaccine candidates were 94pc and 95pc effective, respectively.
Andrew Pollard, Astra’s chief investigator of the Oxford Vaccine Trial, said:
These findings show that we have an effective vaccine that will save many lives. Excitingly, we’ve found that one of our dosing regimens may be around 90pc effective and if this dosing regime is used, more people could be vaccinated with planned vaccine supply.
07:04 AM
Agenda: FTSE set to rally
Good morning. The FTSE 100 is set to be buoyed by growing optimism over Covid-19 vaccines, and a potential Brexit trade deal which now looks within reach.
Later today, Boris Johnson is likely to announce England’s exit strategy from lockdown, which will include a tougher three tier system than before.
UK manufacturing and Services flash PMIs figures will also be released.
5 things to start your day
1) Call for release guidelines after shares spike on vaccine news: Pressure is growing for market-shifting data to first be made public through the RNS, after Moderna data was briefed out prior to its publication.
2) Sainsbury’s bows out of financial services after supermarket banks challenge fails: The retail giant had high hopes for its banking branch, but it has become clear that the big players are still in control.
3) British companies risk billions in new costs if EU blocks data sharing deal: Firms could be forced to agree to new expensive contractual clauses should they want to transfer information between trading blocs after the Brexit transition period ends.
4) Driverless car start-up Wayve gets Richard Branson’s backing as it targets US rivals: The Cambridge firm has emerged as one of Britain’s brightest prospects in the cutting edge sector after securing backing from Virgin Group.
5) House prices peak but beware the slide of March: The post-Covid property frenzy has taken the market by surprise but experts fear the hangover is just months away.
What happened overnight
Asian stocks rose on Monday as investors looked ahead to quarterly US economic data amid unease about anti-coronavirus curbs on business and wrangling over the American presidential election.
Market benchmarks in Shanghai, Seoul and Sydney rose while Hong Kong retreated. Japanese markets were closed for a holiday.
The Shanghai Composite Index rose 0.6pc to 3,397.32 while the Hang Seng in Hong Kong lost 0.2pc to 26,388.89.
The Kospi in Seoul jumped 1.9pc to 2,602.94 and Sydney’s S&P-ASX 200 added 0.5pc to 6,570.90.
New Zealand, Singapore and Jakarta also gained.
Coming up today
Corporate: DMGT, Carr’s (Full year results); Sysgroup, Codemasters, Mind Gym, Lxi Reit, Nextenergy, Sirius (Interim results)
Economics: UK/EU trade deal; Germany, France, UK manufacturing and services flash PMIs (Nov)
