Today's news headlines: 

‘Vaccination stops half of Delta infections, community survey shows’. The Delta variant has created some uncertainty over the last month, with many worried whether this new variant will disrupt the re-opening of economies. In a recent study by Imperial College London, it was found that full vaccination prevents 60% of symptoms while a 90% effectiveness in reducing hospitalisations. This will be a boost for the UK government to have some level of confidence that the easing of restrictions should not come with an overwhelming rise in hospitalisations. (Financial Times)

‘Defaults on emergency Covid loans set to be up to £5bn’. Billions of fiscal support handed out at the start of the pandemic looks set to be lost as many bankers grow weary of defaults. Around 5-10% of SME’s have missed payments for the bounceback loans provided when many businesses were ordered to shut down last year. Last summer, the government gave estimates that 35-60% of all loans would not be repaid, which has an estimated cost to the taxpayer of just short of £20bn. (Financial Times)

Today

Announcements of positive earnings from BP and several banks helped the FTSE 100 rise 0.34% yesterday. Meanwhile, the S&P 500 bounced 0.82% while the Nasdaq lifted 0.55%. There has been little change in Cable overnight which is hovering around $1.3940 this morning. Sterling has gained some ground on the Euro in early trading, testing the €1.1740 level.

Events

China Caixin Services PMI: 54.9 vs 50.3 last month
French final Services PMI: 8:50AM
German final Services PMI: 8:55AM
UK final Services PMI: 9:30AM
US ADP Non-Farm Employment Change: 1:15PM
US ISM Services PMI: 3:00PM
FOMC member Richard Clarida speaks: 3:00PM
US Crude Oil Inventories: 3:30PM

Interbank rates:

GBP/USD – 1.3934
GBP/EUR – 1.1734
EUR/USD – 1.1872
USD/CAD – 1.2522

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