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Mixed messages

Today’s news headlines:

  • ‘Bailey hints at more BOE easing to help shoulder virus costs’ – Yesterday, Andrew Bailey offered another hint that the UK’s central bank is planning more bond purchases after GDP figures put the country in deep contraction to end the first quarter. He said that policymakers have kept open the option to do more than the £200bn they announced in march and acknowledged that the BoE’s actions are helping the government to fund their coronavirus response, which may last for some months to come. (Bloomberg)

  • ‘Mnuchin seeks to assuage investors after Powell’s gloomy outlook’ – Early on Wednesday, Federal Reserve chairman Jerome Powell warned that the US pandemic recovery would take time and that the country is at risk of longer-term economic damage – this sent US stocks to a three-week low. In response, Treasury Secretary Mnuchin sought to soften the blow, saying that if the US reopens its economy slowly and carefully, by next year they could be back to having a great economy, just like before. (Bloomberg)

Today's events, rates, and data 

  • Following Wall Street’s slump yesterday, markets were mixed overnight but generally lower. In the UK, FTSE 100 futures dipped along with the Pound and Gilt yields following Andrew Bailey’s dovish comments. In the US, the Dollar index was marginally higher, whilst there was significant demand for treasuries, pushing yields lower.

Today's events

Aussie Employment Change                    -594.3K vs 0.7k last month
Aussie Unemployment Rate                     6.2% vs 5.2% last month
UK’s BoE Gov Bailey Speaks                   11.30am
US Weekly Unemployment Claims          1.30pm

Interbank rates:

GBPUSD: 1.2200
GBPEUR: 1.1290
EURUSD: 1.0805