An unprecedented fall

Today’s news headlines:

‘Sunak to weigh consumers’ response to easing before completing stimulus plan’. The UK’s Chancellor will wait to see how consumers react to the grand reopening of the hospitality sector on July 4th before deciding whether additional fiscal stimulus is necessary. The Institute for Fiscal Studies added that the case for a VAT cut is dependent on whether firms are willing to cut prices or consumers are willing to go out and spend. Data from the recently reopened high streets has disappointed, suggesting that the general public are still fearful of contracting the virus. (Financial Times)

‘Pandemic causes "unprecedented" fall in global trade’. Europe has taken the biggest hit from an unprecedented decline in world trade, as most big economies suffered from strict lockdown measures. The volume of traded goods globally fell 12.1% in April compared to the previous month, the largest contraction since records began in 2000. Oxford Economics predicts that the decline in goods trade in 2020 will be comparable to that of the global financial crisis in 2009. (Financial Times)

Today's events, rates, and data 

• Wall Street rallied late yesterday as hopes of additional pandemic aid overcame concerns of the continued resurgence of the virus in the US. Overnight, stocks in Asia rose, supporting the risk-on move, while US and EU equity index futures rose. Oil prices continued to rise after news that Russia would curb some of its exports. 

US Core PCE Price Index: 1.30pm
US Personal Spending: 1.30pm
US Revised University of Michigan Consumer Sentiment: 3.00pm

Interbank rates:

GBP/USD: 1.2400
GBP/EUR: 1.1065
EUR/USD: 1.1205
USD/CAD: 1.3658