Supporting the recovery

Today's news headlines: 

‘Budget to give £20bn extension to UK Covid-19 support until September’. Chancellor of the Exchequer, Rishi Sunak, will today announce a slew of measures to nurse Britain back to economic health as he looks to extend Covid-19 support until the end of September. Furlough will remain in its current form until the end of June, when the government expects to have fully reopened the economy. It will, however, remain in place in limited capacity until September, with employers expected to pick up a bigger share of laid-off workers wages. Sunak will also look to help the high street, with an extension of the business rates holiday and £5bn in new grants. The caveat will come in the form of an attached bill, in which the Chancellor will pledge to begin fixing public finances with future tax rises. (Financial Times)

‘Consumers saved $2.9 trillion during the pandemic. Their money will drive the global recovery’. People in the world’s largest economies have saved cash at record rates during the coronavirus pandemic, creating an opportunity for a powerful recovery when lockdown measures are lifted. Half of the savings total is estimated to reside in US banks, with the rest coming from China, the UK, Japan and the biggest Euro-area nations. Although a false dawn, summer 2020 showed how quickly economies can get back on track when restrictions are removed but the risk is that people choose to use savings to pay down debt or hold off on purchases until the recovery is more certain. (Bloomberg)

Today's events, rates, and data 

  • Overnight, Asian stocks rose along with European and US equity futures due to positivity over the US vaccine programme and the prospect of stimulus-fuelled recovery. In currencies, the Pound, Euro and Dollar were little changed ahead of the full UK budget announcement later today.

Today's events

Aussie GDP: 3.1% vs 3.4% previously
Eurozone Final Services PMI: 9.00am
UK Final Services PMI: 9.30am
UK Annual Budget: 12.30pm
US ADP Non-Farm Employment Change: 1.15pm
US ISM Services PMI: 3.00pm
MPC Member Tenreyro Speaks: 4.00pm

Interbank rates

GBP/USD: 1.3975
GBP/EUR: 1.1550
EUR/USD: 1.2095
USD/CAD: 1.2615