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Very elevated uncertainty

Today’s news headlines:

‘Fed advances policy review on "very elevated" uncertainty’. Members of the Federal Reserve have moved closer to a consensus on how to help the flagging US economy amid worries from within the US central bank about risks to the outlook. In the minutes of the Fed’s latest monetary policy meeting, officials cited uncertainty over the path of the economy as ‘very elevated’ due to the potential effect of new waves of the virus and less fiscal support for households and businesses. Several officials commented that additional easing would be required to stimulate the recovery and return inflation towards the 2% target. (Financial Times)

‘China cautious on hitting back at US companies after Huawei sanctions’. Despite Donald Trump’s recent wave of attacks on big Chinese tech companies, China has so far, been unwilling to retaliate. This could be due to fear that it would diminish the economic and innovation benefits of keeping US companies operating in the country. China is also a huge market for US companies, with Nike and Starbucks relying on Chinese consumers for more than a tenth of sales. (Financial Times)

Today's events, rates, and data 

  • A risk-off tone dominated markets overnight after the Fed struck a dovish chord in its latest monetary policy meeting minutes. Stocks tumbled in the Asia-Pacific region, following the S&P 500 which was 0.4% down on Wednesday’s close. Equity futures are predicting another day of losses on Wall Street.

Today's events

German PPI: 0.2% vs 0.0% previously 
UK CBI Industrial Order Expectations: 11.00am
ADP Canada National Employment Report: 1.30pm
US Philly Fed Manufacturing Index: 1.30pm
US Weekly Jobless Claims: 1.30pm
US CB Leading Index: 3.00pm

Interbank rates:

GBP/USD: 1.3065
GBP/EUR: 1.1035
EUR/USD: 1.1840
USD/CAD: 1.3225