MNI Gilt Week Ahead - Feb 15 2021: Focus on the lockdown roadmap

• There are a number of events worth watching this week, but the roadmap out of lockdown is likely to continue to dominate the domestic agenda. The government is due to announce on 22 February whether schools will re-open on 8 March and is widely expected to confirm that all school years of both primary and secondary schools will go back simultaneously. The three criteria the government are looking at are all looking good:
  • 1) The number of patients in hospital is approaching the peak of the first wave and is expected to half over the next month according to the weekend press.
  • 2) The vaccination programme remains on track with over 15 million people now vaccinated (which is the vast majority of over 70s, health care workers and the "extremely vulnerable"). Now vaccination will start on Phase 2 which will initially focus on the over 65s and "vulnerable" under 65s before moving on to the rest of the over 50s population. If the current pace of vaccination is maintained, vaccinations for this group would be completed by the end of March.
  • 3) The 7-day moving average of new cases up to 7 February has fallen below the November lockdown low and is now at the lowest level since early October.
• The weekend press also outlined that meeting one person from another household outside on a public bench would likely be allowed from 8 March (at the moment you can meet one person outside for exercise but not to sit down). However, the roadmap for the rest of the easing of the lockdown remains unclear at present.
• In addition to this, the global reflation trade is continuing apace, with optimism surrounding the lifting of restrictions through vaccination in the medium-term, US fiscal stimulus and of potentially more coordinated fiscal spending in the Eurozone with Draghi's appointment as Italian Prime Minister.
• Looking to the week ahead, we will receive inflation data on Wednesday but Friday is the big data day this week with GfK consumer confidence data, retail sales, the flash PMIs, CBI industrial trends and the last public finance data before the 3 March Budget (so the data which the OBR will base its forecasts on). We will also hear from both Ramsden as he gives a speech at the Birmingham University Economics Department and Saunders who gives a webinar on the labour market.

GiltWeekAhead15022021.pdf