Back to his old tricks

Today’s news headlines:

‘German coalition agrees €130bn stimulus’. Struggling to prevent the worst recession since World War II, the German government has cobbled together a €130bn rescue package which will reduce VAT from 19% to 16% and the lower band tax rate from 7% to 5%.  Additionally, the government is planning a €300 per child one-off payment. (Financial Times)

‘Pentagon Chief breaks with Trump over using troops for protests’. The tension in America continues to rise after Trump ordered the forcible clearance of protesters on his way to a photo opportunity. Coming on the heels of the death of George Floyd who was killed in police custody, protests and rioting have sprung up in several parts of the country. Some see Trump's heavy-handed use of force as an echo of the 2016 election, where other candidates and voters criticised the now President for having a racist stance. (Financial Times)

Today's events, rates, and data 

• Overnight, the risk-on move continued to take form as markets repriced the risk of a second lockdown scenario. The counterpoint to that fundamental improvement is the inflammation of geopolitical risk, including US/Chinese relations and US internal squabbles.

Today's events

AU Retail Sales: -17.7% vs -17.9% last month
UK Construction PMI: 9:30AM
EU Retail Sales: 10:00AM
EU Monetary policy statement: 12:45PM
EU ECB press conference: 1:30PM
US Jobless Claims: 1:30PM
CA BoC's Gravelle speaks: 7:00PM

Interbank rates:

GBP/USD – 1.2520
GBP/EUR – 1.1175
EUR/USD – 1.1200
USD/CAD – 1.3520