Rising tensions

Today’s news headlines:

‘Gove urges Brussels to take action as Northern Ireland tensions rise’. The UK will try and de-escalate rising border tensions in Northern Ireland as the threat of post-Brexit violence looms. Mr Gove will ask the European Commission to extend ‘grace periods’ on key checks of goods in order to ease trade disruption. Gove admitted that problems resulting from the ‘Northern Ireland Protocol’ part of the UK’s Brexit deal were more than just teething problems, as described by Boris Johnson last month. The protocol leaves Northern Ireland in the single market for goods and under EU customs rules, effectively forming a hard border in the Irish Sea. (Financial Times)

‘Former ECB Chief Mario Draghi tapped to lead Italy out of its crisis’. The man who led Europe out of the global financial crisis has been tapped to become Italy’s next Prime Minister, in a bid to steer the country out of its worst recession since the end of World War II. Head of state, Sergio Mattarella, will meet Draghi today, after Giuseppe Conte failed to garner enough support to make a comeback. The appointment of a crisis-fighter of Draghi’s stature will ease fears in markets over Italy’s future, as seen in an initial rally in the nation’s bonds. (Bloomberg)

Today's events, rates, and data 

  • The US Dollar continues to try and move out of the downward trend channel that began in March 2020, taking the Greenback to its lowest level since early 2018. Friday’s non-farm payroll data might act as a catalyst in either direction, but for now the Dollar is treading water at current levels. Equity futures are higher this morning after Asian stocks rallied overnight and higher Treasury yields could mean another day of good risk sentiment.

Today's events

China Caixin Services PMI: 52.0 vs 56.3 previously
EU Final Services PMI: 9.00am
UK Final Services PMI: 9.30am
US ADP Non-Farm Employment Change: 1.15pm
US ISM Services PMI: 3.00pm

Interbank rates

GBP/USD: 1.3670
GBP/EUR: 1.1355
EUR/USD: 1.2040
USD/CAD: 1.2770