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Economies tested

Today's news headlines: 

‘End of Covid-19 unemployment benefits poses test for US recovery’. US jobless benefits are due to come to an end this week, in a change that’s expected to affect around 7.5 million Americans. This transition has come at a somewhat awkward time, as job growth slowed in August and we’ve yet to see a consistent trend in Non-Farm payrolls. The jobless benefits scheme has been blamed by the Republican party for discouraging people from returning to work, with some red states withdrawing this support in June. Despite this unknown next step, many economists believe the US economy has enough momentum behind it to weather any downturn in the jobs market. (Financial Times)

‘UK recovery expected to withstand autumn surge in Covid cases’. As schools re-open and the cold weather starts to bite, the next rise in Coronavirus cases in the UK appears not far away. This raises the question of whether Covid sensitive sectors will be able to withstand such a rise in cases. Economists have suggested that the UK economy should show some resilience to the next wave, given the countries high vaccination rates. The key metric to monitor will be hospitalisations which could hurt consumer confidence. Some health ministers have also suggested that the government re-emphasising mask-wearing could make a return. (Financial Times)


The FTSE 100 climbed 0.68% yesterday, as concerns about Federal Reserve tapering eased, while the Euro Stoxx 600 closed 0.69% higher. Overnight, the Reserve Bank of Australia committed to more dovish monetary conditions amid the Delta Coronavirus outbreak in the country, leading to a broad-based weakening in the currency. The US 10-year bond yield continues to tick higher, trading just below 1.35% this morning.


UK British Retail Consortium Retail Sales Monitor y/y: 1.5% vs 4.7% last month
Australia interest rate decision: 0.10% vs 0.10% previously
German Industrial Production m/m: 1.0% vs -1.0% last month
UK Monetary Policy Committee member Michael Saunders speaks: 8:30AM
German ZEW Economic Sentiment: 10:00AM
Eurozone ZEW Economic Sentiment: 10:00AM

Interbank rates:

GBP/USD – 1.3822
GBP/EUR – 1.1650
EUR/USD – 1.1864
USD/CAD – 1.2552

The markets are moving. To speak to our team, please call +44 (0)20 3465 8200.