Sterling Pressured After PM Johnson Signals Potential For Further Restrictions

Sterling starts the week on a softer footing as the UK recorded another daily high in new Covid-19 cases, while PM Johnson warned that tougher restrictions might be imminent. Johnson told the BBC on Sunday that the gov't may have to keep schools shut. Opposition leader Starmer urged the PM to declare a nation-wide lockdown within 24h, while Scottish First Min Sturgeon said that the Scottish gov't will consider "further action" to contain the spread of the virus when it meets on Monday.

• Meanwhile, a Times/Focaldata poll using the MRP method found that PM Johnson could lose his seat in the Commons & the Tories could lose their parliamentary majority, should there be a general election. The poll estimated the number of seats that would be captured by the Conservatives at 284, with Labour poised to get 282. Such an outcome could make the SNP a kingmaker, giving fresh impetus to their calls for Scottish independence.
• The WSJ reported that MGM raised its offer for Entain to more than $10bn, although the talks are still ongoing and no agreement has been reached as of yet.
• Cable sits -6 pips at $1.3666, bears keep an eye on Dec 30 low of $1.3494. On the topside, focus falls on Dec 31 high of $1.3686, followed by Mar 1, 2018 low of $1.3712.
• EUR/GBP last seen +19 pips at GBP0.8957. Further gains past Dec 29 high of GBP0.9093 would expose Dec 22 high of GBP0.9156. Bears look for a retreat under Dec 31/1 lows of GBP0.8932/29, before targeting Nov 23 low of GBP0.8867.
• Final UK Markit M'fing PMI comes out today, with the remaining Markit PMI readings due Wednesday (Services) and Thursday (Construction).