About rhetoric, not substance

Today’s news headlines:

‘Boris Johnson to announce tough new Covid-19 restrictions’. Following the recent spike in infection cases in the UK, the government is announcing new tough restrictions on Britons. The new measures are said to restrict gatherings of more than six people, unless there are special exemptions for weddings, funerals, etc. Someone breaching the rule may be fined £100, which doubles on subsequent breaches up to £3,200. These measures have been put in place to stop underground parties for late teens that are suspected of spreading the virus, though are at odds with governments return to work stance. (Financial Times)

‘Senate Republicans propose scrapping $200bn for Fed crisis lending’. The fiscal stimulus battle between Republicans and Democrats is heating up. The Trump Administration is backing the Republican bill which includes halved employment support, no cash subsidies to individuals, no funding for state or local government, and now most recently, cuts the Fed's emergency funding power by $200bn. In March, legislators set aside $454bn for the Fed to fund emergency credit facilities which are used to buy a wide range of assets. The Democrats have made it clear that the Republican’s help-in-name-only bill is entirely insufficient to help the average person, and attempts to punish Democrat-held states by denied government support. (Financial Times)

Today's events, rates, and data

Yesterday was a third straight session of declines for tech stocks, signalling a limit to market rallies based on central bank policy. Well, it's either that or geopolitical tensions are limiting risk appetite; we would wager a portion of each. This week has had a rather quiet data calendar, but news headlines have more than made up for it. It's important to note that the Dollar index is quickly approaching the 50-day moving average, which should act as resistance to further appreciation. The Pound, which plummeted for two straight sessions, is firmly resting on the 100-day moving average.

Today's events

AU Westpac Consumer Sentiment: 18% vs -9.5% last month
NZ ANZ Business Confidence: -26.0 vs -41.8 last month
CN CPI y/y: 2.4% vs 2.7% last month
CA Bank of Canada rate statement: 3:00 PM
UK RICS House Price Balance: 12:00 AM

Interbank rates:

GBP/USD – 1.2940
GBP/EUR – 1.0990
EUR/USD – 1.1770
USD/CAD – 1.3240