A stunning blow

Today’s news headlines:

‘US economy suffers sharpest postwar contraction in second quarter’. US GDP came out showing a decline of 32.9% on the year, the deepest drop since World War Two ended. This comes as a hard hit to President Trump, who will find it difficult to campaign with these economic credentials. In fact, the President is calling for a postponement of the voting in November, though he has no official authority to do so. (Financial Times)

‘Big Tech’s leaders squirm as documents reveal their power’. Things didn't go well for Apple, Amazon, Alphabet, and Facebook when testifying before congress via video conference. Various internal documents, which reveal anti-competition behaviour, were used to confront some of the world's most powerful businesspeople. In many cases, they were left speechless, unable to defend their actions substantially, though Tim Cook, Apple CEO, came off looking the best of the bunch. (Financial Times)

Today's events, rates, and data 

  • US GDP was a game-changer yesterday from a political perspective, which led to a Tweet from Donald Trump advocating the delay of the election. Other than that, the market trend has more or less continued unphased. The Dollar index continues to take losses, resulting in gains for GBP, EUR, and JPY. Sterling's trade-weighted index is less than 1% below the 200-day moving average, which is likely to be the next point of resistance. It's pretty telling that US and EU equities have plateaued over the past week; perhaps the economic data is finally impacting valuations.

Today's events

JP    Preliminary Industrial Production m/m: 2.7% vs -8.9%  last month
CN   Manufacturing PMI m/m: 51.1 vs 50.9 last month
CN   Non-Manufacturing PMI m/m: 54.2 vs 54.4 last month
FR    GDP q/q: -13.85 vs -5.3% last quarter
GB   National HPI m/m: 1.7% vs -1.6% last month
DE   Retails Sales m/m: -1.6% vs 12.7% last month
FR   Consumer Spending m/m: 9.0% vs 37.45 last month
EU  CPI and core CPI: 10:00 AM
CA  GDP and Personal Spending: 1:30 PM
US  Chicago PMI: 2:45 PM
US  University of Michigan Sentiment: 3:00 PM

Interbank rates:

GBP/USD – 1.3125
GBP/EUR – 1.1040
EUR/USD – 1.1890
USD/CAD – 1.3425