Dark predictions

Today’s news headlines:

‘City warned EU will do London no favours on financial services’. Jonathan Hill, a former EU financial services commissioner, has voiced some sobering views on the EU’s probable resistance to market equivalence, once the transition period is over. He goes on to say that the EU has been unable to capitalise on Brexit, and it was “striking” that London was still dominant even after “four and a half years of political paralysis”. Hill suggested that the UK should look to America and Asia as its core competitors, and proposed a measured review of our financial ecosystem rather than a wholesale deregulation effort–the so-called race to the bottom–many regulators fear.  (Financial Times)

‘Wolfgang Schäuble issues warning on EU recovery fund’. Former German Finance Minister, Wolfgang Schäuble, has voiced criticism over the negotiations of the €750bn EU rescue fund. He believes the fund focuses too much on the size of the pie and the division of slices, rather than establishing meaningful reforms to drive forward with the money. Schäuble suggested issues over some member states qualifying for their allotted funds, with oversight of spending plans at the national levels being unavailable. (Financial Times)

Today's events, rates, and data 

  • As expected, delays to the US stimulus negotiations are limiting equity upside, causing some pull backs in the Asian session and renewed bout of risk off. The Dollar opens this morning in the third straight session of gains, albeit small ones. Overnight, Sterling was the loser, as the government continued discussions on international travel quarantine measures, and the use of hotels throughout the UK to assist them.

Today's events

JP Bank of Japan CPI y/y: -0.1% vs -0.1% last month
UK Average Earnings Index 3m/y: 3.6% vs 2.8% last month
UK Claimant Count Change: 7.0k vs 38.1k last month
UK Unemployment Rate: 5.0% vs 4.9% last month
UK CBI Realised Sales: 11:00am
US HPI m/m: 2:00pm
US CB Consumer Confidence: 3:00pm

Interbank rates

GBP/USD: 1.3620
GBP/EUR: 1.1230
EUR/USD: 1.2120
USD/CAD: 1.2760