Holding up the recovery

Today’s news headlines:

‘Fed official warns partisan politics will "endanger" US recovery’. Charles Evans, President of the Federal Reserve Bank of Chicago, weighed in on fiscal matters yesterday amid the economic damage of the coronavirus pandemic. He commented that the course of the US recovery depended on substantial additional support from the government to avoid sharp declines in household spending and a wave of business failures. This comes at a time when partisan politics has led to a stalemate on the latest US stimulus package. (Financial Times)

‘Eurozone retail sales run out of steam as north-south split emerges’. Retail sales in the Euro area fell in the month of July for the first time in three months as a rise in consumer spending in the region ran out of steam. The pace of economic recovery in Germany, France, and the Netherlands remains strong; however, the levels in Spain, Portugal, and Greece remained in negative territory. The data reflects that the V-shaped rebound in retail trade might prove to be the first leg of a longer W-shaped recovery, according to economists at Allianz. (Financial Times)

Today's events, rates, and data 

• The US Dollar remained steady in the lead up to today’s important US jobs data that will shed some light on the strength of the economic recovery from the Covid-19 outbreak. After a bloodbath in tech stocks yesterday, equity index futures are set for further losses today heading into the long holiday weekend for the US.

Today's events

Australian Retail Sales: 3.2% vs 3.3% previously
German Factory Orders: 2.8% vs 28.8% previously
UK MPC Member Saunders Speaks: 10.30am
Canada Employment Change and Employment Rate: 1.30pm
US Non-Farm Payrolls: 1.30pm
US Average Earnings: 1.30pm

Interbank rates:

GBP/USD: 1.3275
GBP/EUR: 1.1210
EUR/USD: 1.1840
USD/CAD: 1.3125