CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

FTSE 100 shakes off Omicron woes, consumer services on edge

By Jenni Reid

08:37, 13 December 2021

Boris Johnson gives a televised address
UK Prime Minister Boris Johnson has warned of an Omicron “wave” and urged people to get booster jabs – Photo: Alamy

The FTSE 100 opened up slightly Monday morning, failing to be spooked by warnings of a “wave” of the Covid-19 Omicron variant. 

The index was up around 0.2% with gains led by miners BHP and Anglo American (AALI). The FTSE 250 was flat. 

It followed a televised address on Sunday evening in which British Prime Minister Boris Johnson announced an “​​Omicron Emergency Booster National Mission” which will see all over-18s in England offered a third vaccine by the end of the year.

Scotland and Northern Ireland also plan to meet this target, while Wales has not yet updated its target for the end of January.

Booster needed

“No one should be in any doubt: there is a tidal wave of Omicron coming, and I’m afraid it is now clear that two doses of vaccine are simply not enough to give the level of protection we all need,” Johnson said. 

“But the good news is that our scientists are confident that with a third dose, a booster dose, we can all bring our level of protection back up,” he added. 

On Thursday last week, the government announced new Covid rules for England including face masks being made compulsory in most public indoor venues, excluding hospitality; advice to work from home where possible, and mandatory use of Covid passes to enter events with over 500 people. 

What is your sentiment on UK100?

7539.3
Bullish
or
Bearish
Vote to see Traders sentiment!

Economic blow 

Analysts at Pantheon Macroeconomics said the effects of Omicron would likely show up in a lower services Purchasing Managers Index after near-real-time data showed panic over the variant had “dealt a blow to consumer services businesses.”

Hospitality, leisure and travel businesses have expressed fears over the impact of new measures as well as lower consumer confidence. 

The bosses of UK-based airlines including British Airways (IAG), Easyjet (EZJ) and Virgin Atlantic have written to the government requesting economic support for the industry. They also called for the removal of new rules requiring a pre-departure Covid test and for people to self-isolate before receiving the results of a Day 2 PCR test. 

Kate Nicholls, head of trade association UK Hospitality, said last week that the new restrictions would “significantly impact consumer confidence and be particularly devastating to city and town centre venues” during their most important month of the year.

US500

4,567.50 Price
+0.010% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.7

US100

15,879.00 Price
-0.320% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 1.8

DE40

16,368.60 Price
+0.750% 1D Chg, %
Long position overnight fee -0.0221%
Short position overnight fee -0.0001%
Overnight fee time 22:00 (UTC)
Spread 1.5

US30

36,030.10 Price
+0.230% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 2.2

Pantheon’s Samuel Tombs and Gabriella Dickens also noted that October’s GDP report – which showed GDP growth of 0.1%, 0.55 below its pre-Covid level – meant “the economic recovery was petering out well before consumers began to retrench in the face of the new Covid-19 variant.”

Rate debate 

This Thursday will see the Bank of England’s Monetary Policy Committee (MPC) meet to vote on raising interest rates, a move no longer expected by the market.

“The signs are that the Bank of England will wait until early next year before raising interest rates,” said Michael Hewson, chief market analyst at CMC Markets. 

“Following the government’s latest work-from-home advice, consensus estimates point to a possible rate rise in February. Mind you, the bank made a mockery of predictions in November, when, having hinted that a rate hike was on the cards, it opted to keep the base rate unchanged at 0.1%.”

Hewson called the decision to hold rates in November now looked like a “missed opportunity” as Omicron makes it even more cautious. 

Around the world

Asia-Pacific markets were up on Monday on US inflation data coming in line with expectations last week. 

Eyes will now be on the US Federal Reserve, which is set to meet in the coming days. 

“The [Federal Open Market Committee] seems keen to move faster on tapering to create room for interest rate rises next year, with markets already having priced in two rate hikes,” said Hewson. 

Sterling was down 0.17% against the dollar, to $1.32, its lowest level since this time last year. It was up 0.08% to €1.17 against the euro and down 0.02% to ¥150.44 against the Japanese yen.

Read more: Businesses nervous as England activates Covid Plan B

Markets in this article

AALl
Anglo American
23.000 USD
1.925 +9.140%
BHP
BHP Group
62.80 USD
2.02 +3.320%
EZJgb
EasyJet
4.72 USD
0.17 +3.810%
IAG
IAG - GBP
1.5705 USD
0.0445 +2.930%

Related topics

Rate this article

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 570.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading