Reporters say PM Boris Johnson is set to address the UK at 8pm today, in what is expected to result in a tougher national lockdown.

DATA FLASH: US manufacturing PMI for December has come in at 57.1 in December, up from 56.7 in November.

That marks the steepest improvement in US manufacturing activity in more than six years - since September 2014. It was also higher than the flash reading of 56.5.

But the survey also showed that Covid is disrupting supply chains and weighing on demand.

Chris Williamson, Chief Business Economist at IHS Markit said:

Manufacturers reported a strong end to 2020, with production and order books continuing to grow, albeit with the rates of expansion slowing as a result of rising virus case numbers and related restrictions.

Producers of consumer goods reported a marked downturn in orders and production, reflecting weakened consumer expenditure amid the resurgence of COVID-19.

More encouragingly, producers of machinery and equipment reported sustained strong demand, suggesting companies are increasing their investment spending. Producers of inputs to other factories also fared well, as manufacturers sought to restock their warehouses.

However, the survey also highlights how manufacturers are now not only facing weaker demand conditions due to the pandemic, but are also seeing COVID-19 disrupt supply chains further, causing shipping delays. These delays are limiting production capabilities as well as driving producers’ input prices sharply higher, adding to the sector’s woes.

Well, that was short-lived. The Dow is now reversing early gains and is down 0.1%.

Scotland’s lockdown has not done any favours for the pound, which is trading lower by around 0.3% against the US dollar (despite dollar weakness) at 1.3627, and 1% lower versus the euro at 1.1075.

The US dollar has slumped as investors become more willing to take on risk in light of the vaccine rollout.

The dollar index - which measures the greenback against a basket of other currencies – is currently down 0.4% at 89.537.

That move has helped safe haven-seeking investors to assets like gold, which is also gaining ground amid the threat of tougher Covid lockdowns in countries like the UK and Germany.

Spot gold is currently trading at its highest level since 9 November at around $1,939 per ounce.

Naeem Aslam, chief market analyst at AvaTrade, says:

Gold prices have started to rise once again as traders are concerned about the possibility of further lockdowns.

British Prime Minister Boris Johnson could be announcing tougher lockdown measures this week.

There is also a possibility that we may see a similar scenario playing out in the US as well, and the new normal may not be able to establish itself until the second quarter. This means that there may not any change in the monetary policy response from the Fed.

The dollar index is still very much lifeless, and this is also helping the gold prices to continue to move higher. The fact that the price has crossed the 19,00 price level, there are strong chances that gold price may once again cross the 2,000 price level.

Meanwhile, Bitcoin prices are back on the rise, up 6.2% on the session at around $31,070 - but still more than $3,000 shy of yesterday’s record high of more than $34,800.

While vaccine hopes have buoyed markets, Covid continues to hurt major sectors like hospitality, which have shed thousands of jobs during the pandemic.

UK restaurants and casual dining firms recorded almost 30,000 job losses in 2020 as the Covid-19 pandemic drove a 163% jump in redundancies, PA Media reports.

Data compiled by the Centre for Retail Research (CRR) revealed that 29,684 jobs were lost across fine dining, independent businesses and large multiple casual-dining chains during the year.

It represents a sharp increase from 2019, when 11,280 job losses were reported across the sector, after firms were hit by two national lockdowns, local lockdown restrictions, curfews, changes to service rules and recently strengthened tier measures.

The CRR also said branch closures by hospitality firms had increased by 76% to 1,621, compared with 922 in 2019.

It highlighted major closure proposals and redundancy plans at companies such as Pizza Express, SSP Group, Casual Dining Group, The Restaurant Group and Mitchells & Butlers during the year.

Oil investors are keeping a close eye on the Opec meeting today. That could explain why markets are not really reacting to news of the oil tanker seizure, which would usually trigger geopolitical concerns and push up prices.

Opec producing nations are reportedly expected to announce production cuts for February, which could help prop up prices that have been hard-hit by reduced fuel demand during the Covid crisis.

Brent crude prices have lost some steam since this morning, when they were up 2.2% at around $52.94 per barrel.

The global oil benchmark is now nearly at dollar lower, down around 0.1% at $51.74. That’s despite news that Iran has seized a South Korean tanker.

Iranian media reported on Monday that the country’s elite Revolutionary Guards navy has seized a South Korean vessel “for polluting the Persian Gulf with chemicals”, my colleague Patrick Wintour writes.

A South Korean-flagged tanker, the MT Hankuk Chemi, appears to have been seized by Iran and is now in Iranian territorial waters, two maritime security companies said.

Satellite data from MarineTraffic.com showed the MT Hankuk Chemi off the port of Bandar Abbas on Monday afternoon without explanation. It had been travelling from Saudi Arabia to Fujairah in the UAE. The ship’s owners could not be immediately reached for comment.

It comes as Iran says it has resumed enriching uranium to up to 20% purity, in a significant breach of the 2015 nuclear accord, amid tensions with the US in the final weeks of the Trump administration.

Time to check back in on US futures, which are pointing to record highs for the Dow and S&P at the start of trading this afternoon:

• Dow futures are up 183 points or 0.6%
• S&P futures are up 20.5 points or 0.55%
• Nasdaq futures are up 57.75 points at 0.45%

Hundreds of Google employees have reportedly formed a union, in a rare move at a Silicon Valley tech firm, which is expected to raise tensions with the company’s leadership.

Google had fired employees involved in organising a worker union as recently as mid-December.

The New York Times (£) said the group is known as the Alphabet Workers Union - referring to Google’s parent company – and was formed in secret over the past year.

Its leadership was elected last month and is now affiliated with the Communications Workers of America, which represents telecoms and media staff in the US and Canada.

However, it is a so-called minority union that currently represents around 225 of the company’s 260,000 full-time staff and contractors.

Workers told the NYT that it was primarily part of efforts to give structure and longevity to activism at Google, rather than trying to force employers to the table to negotiate a contract for workers.

The paper has quotes Google’s director of people operations as saying:

We’ve always worked hard to create a supportive and rewarding workplace for our work force. Of course, our employees have protected labour rights that we support. But as we’ve always done, we’ll continue engaging directly with all our employees.

AJ Bell investment director Russ Mould comments on the FTSE 100’s surging start to 2021:

The FTSE 100 started 2021 with a bang. Surging more than 2% higher and closing on the 6,700 mark amid M&A news and confirmation that roll-out of the AstraZeneca coronavirus vaccine will commence today.

MGM’s blockbuster bid for gambling group Entain and plumbing firm Ferguson’s sale of its UK business play second fiddle to the vaccine news which is an even more important focus for the markets given the more severe restrictions necessitated by a more infectious strain of Covid.

For now investors clearly believe the vaccine will provide the catalyst for a big recovery, perhaps after a tough first quarter, but getting enough of the population inoculated will be a big logistical challenge.

A key determining factor could be whether the existing vaccines prevent transmission of Covid or just infection – this could determine how quickly we return to normality and how patient the market might be.

The pan-European Stoxx 600 is set for its largest one -day gain since 9 November, after rising 1.6% this morning.

It comes as the largest-listed stocks make gains across the UK and mainland Europe:

• FTSE 100 is up 2.7%
• Germany’s Dax is up 1.2%
• France’s Cac 40 is up 1.6%
• Italy’s FTSE MIB is up 1%

Tougher lockdowns across British hit shopper footfall across the country last week, having fallen more than 23.% on the previous week.

Market research from Springboard also showed that footfall across British retailers was down 55.7% compared to the same week last year.

Bitcoin prices have fallen sharply this morning, dropping by around $4,000 from the record peak it hit on Sunday.

The cryptocurrency is currently worth around $29,180, but that is around 16% below the $34,800 reached on its 12-year anniversary yesterday.

Bitcoin’s value has surged, with Sunday’s record high coming less than three weeks after trading above $20,000 for the first time.

As my colleague Graeme Wearden explained yesterday, some sceptics warn that the crypto boom could be heading for trouble, and that the coin itself has no intrinsic value.

There are more than 18m bitcoins in existence, created by the miners who provide the computational power underpinning the blockchain, which records transactions made using bitcoin. The system has a hardwired maximum of 21m coins.

BREAKING: The German government and state authorities have agreed on extending lockdown until 31 January.

That’s according to Reuters, which is citing local newspaper Bild.

The pound is losing ground to the euro this morning, falling more than 0.5% to around 1.1126

Not only is the euro gaining on the back of strong manufacturing PMI data, but sterling’s post-Brexit deal rally is facing. The pound jumped in the wake of news that UK and EU officials had struck a last minute trade deal on Christmas Eve.

The euro is also gaining ground against the US dollar, up 1.2% to around 1.2296.

Germany’s manufacturing sector, which accounts for around a fifth of its economy, expanded last month, with the PMI rising to 58.3 in December from 57.8 in November.

That was slightly below expectations based on the flash estimate of 58.6. However, it is still the highest reading since February 2018.

Stay tuned for Eurozone readings in just a few minutes’ time.

More manufacturing PMI data, this time from France, has come in at 51.1 for December.

That’s in line with expectations and higher than November’s reading of 49.6.

Correction: French manufacturing PMI was 49.6 in November, not 51.1 (which was the flash reading, not the prior month)

DATA FLASH: Italian manufacturing PMI shows the industry was still in expansion territory last month.

However, the reading has fallen short of expectations, coming in at 52.8 in December versus Reuters forecasts for 53.7.

However, that’s still higher than the 51.5 recorded in November.

Entain shares are topping the FTSE 100 after rising 28% and hitting a record high of 1,455p this morning.

It comes after the owner of the Ladbrokes and Coral betting brands said on Monday an £8bn takeover bid from its US joint venture partner MGM Resorts International significantly undervalued the business, Jasper Jolly writes.

Entain said the offer by MGM, the owner of the Bellagio casino in Las Vegas, undervalued the British group, and questioned the rationale for a merger, in a statement to the stock market on Monday morning.

The offer equated to a value of 1,383p per Entain share, a 22% premium to the 1,133.5p price on New Year’s Eve, the last trading day before the bid was first reported.

It values the UK company at about £8.1bn. MGM was also willing to make a partial cash offer, Entain said. Entain shareholders would own 41.5% of the enlarged group.

DATA FLASH: Spain’s manufacturing sector grew slower than thought in December.

The final reading of manufacturing PMI came in at 51.0, which is lower than analyst expectations for 52.8. However, that is higher than 49.8 recorded in November.

A reading above 50 signals expansion.

Here’s a photo of Brian Pinker – who has become the first person in the world to receive the Oxford/AstraZeneca vaccine – which will undoubtedly be making the rounds on newscasts this morning.

AstraZeneca shares are not among the top risers on the FTSE 100, but the stock is still up 1.7% this morning.

It comes as the first dose of the vaccine it created with Oxford university was given to a patient this morning. It is part of the UK’s larger inoculation efforts:

AstraZeneca has said it will not profit from the vaccine. That pledge has reduced interest from investors who are looking to bet on companies involved in Covid recovery efforts.