Covid conundrum

Today’s news headlines:

‘Chancellor warned his job boosting package may fall flat’. In yesterday’s summer statement which announced £30bn in spending, a goodly portion of Rishi Sunak’s measures were aimed at young people and low-income workers. For instance, the furlough scheme will now be replaced by a £1,000 payment if furloughed workers are rehired, with the aim of avoiding zombie jobs which can only exist under government subsidy. Many experts were critical of the announcement, saying that the measure is insufficient to make a great difference to employment, and the lack of furlough could rapidly increase unemployment. (Financial Times)

‘US coronavirus cases jump by one-day record of 62,000’. On Wednesday, the number of infections broke through the previous record and reached a new high. The case of deaths also rose, undermining several of the Trump Administration's rationalisations for the continued opening of the economy. There are now ongoing discussions to reassess school openings in the autumn, which could greatly damage Mr Trump’s bid for re-election in November. (Financial Times)

Today's events, rates, and data

Yesterday was quite light on the data front, which is the theme for the rest of the week, but news headlines continue to drive markets. The Dollar index continues to depreciate back towards 2019 ranges, but it's a very slow and steady movement rather than the sharper moves we experienced in the outset of the Corona saga. The Pound index has been appreciating since the start of the month, but again, the pace of gains is very modest. With a light calendar heading into the weekend, the market focus remains on global stimulus measures and coronavirus infection numbers.

Today's events

UK RICS House Price Balance: -15% vs -32% last month
JP Core Machinery Orders: 1.7% vs -12% last month
NZ ANZ Business Confidence: -29.8 vs -34.4 last month
CN CPI: 2.5% vs 2.4% last month
CN PPI: -3.0% vs -3.7% last month
US Unemployment Claims: 1:30 PM

Interbank rates:

GBP/USD: 1.2550
GBP/EUR: 1.1120
EUR/USD: 1.1285
USD/CAD: 1.3600