Clear as mud

Today’s news headlines:

‘New US jobless claims rise back above 1M’. Having slipped below 1M on the week of August 3rd, it was hoped a steady decline would evidence a gradual recovery underway. Instead, the number jumped back above the one million mark in a sign of continued challenges in the US job market. This comes at a particularly bad time because Republicans and Democrats have yet to agree to a resumption of the coronavirus unemployment benefits that expired at the beginning of the month. (Financial Times)

‘UK public debt tops £2T for first time on Covid-19 spending boom’. According to the Office for National Statistics, UK public debt has risen above £2T for the first time ever in light of the coronavirus support efforts. That said, some economists have commented that the figure is below expectations, which suggests greater consumer spending, which is a rather positive sign. (Financial Times)

Today's events, rates, and data 

  • Yesterday we witnessed yet another reversal in FX markets. The Dollar sell-off continued, working towards Tuesday lows, but ran out of steam. More surprisingly the trade-weighted Pound has broken above the 200-day moving average again this morning, while the EUR index is on the third day of lower lows. That said, both EUR and GBP are near the top of their respective ranges, and there seems limited appetite to push them much higher. The substantial run of data today might add some additional impetus if the readings indicate improvement, as the market consensus expects.

Today's events

AU  Flash Manufacturing PMI: 53.9 vs 54.0 last month
AU  Flash Services PMI: 48.1 vs 58.2 last month
GB  GfK Consumer Confidence: -27 vs -27 last month
JP  Core CPI: 0 vs 0 last month
JP  Manufacturing PMI: 46.6 vs 45.2 last month
AU Retail Sales: 3.3% vs 2.7% last month
GB  Retail Sales: 3.6% vs 13.9% last month
EU  French Service PMI: 51.9 vs 57.3 last month
EU  French Manufacturing PMI: 49.0 vs 52.4 last month
EU  German Manufacturing PMI: 53.0 vs 51.0 last month
EU  German Service PMI: 50.8 vs 55.6 last month
EU  Manufacturing PMI: 51.7 vs 51.8 last month 
EU  Service PMI: 50.1 vs 54.7 last month 
GB  CBI Industrial Orders Expectations: 11:00 AM
CA  Retail Sales: 1:30 PM
US  Manufacturing PMI: 2:45 PM
US  Service PMI: 2:45 PM
EU Consumer Confidence: 3:00 PM

Interbank rates:

GBP/USD – 1.3235
GBP/EUR – 1.1150
EUR/USD – 1.1865
USD/CAD – 1.3165