Growing pains

Today’s news headlines:

‘Chinese GDP grows 3.2% in second quarter’. In one of the global economy’s earliest signs of a recovery from the Covid-19 pandemic, China’s economy returned to growth in Q2 of 2020. Despite consumption remaining weak, greater state support for the industrial sector bolstered the return to growth along with a sharp fall in virus cases. Domestically, Retail Sales fell by 3.9% in Q2 signalling an uneven recovery; however, exports unexpectedly rose 0.5% when compared to June 2019. (Financial Times)

‘UK business lobby sees sweeping job losses when support ends’. Although many companies have shed staff during the coronavirus pandemic, around a third of UK businesses expect to cut jobs further when the government furlough scheme is phased out. This survey by the British Chamber of Commerce follows a warning by the Office for Budget Responsibility that the jobless rate could reach 12/13% by the end of the year. Despite this, the UK’s jobless claims fell in June, and the economy lost fewer jobs than expected in the three months through May as the government support scheme persisted. (Bloomberg)

Today's events, rates, and data 

• Risk appetite fell overnight following mixed data out of China. A promising rebound in GDP was welcomed, but a worrying slide in the rate of domestic consumption knocked investors' faith in a quick recovery from the pandemic. US and European stock futures fell along with Chinese shares. In currencies, the US Dollar gained against a basket of its peers, including the Aussie Dollar and Chinese Yuan. 

Today's events

Aussie Unemployment Rate: 7.4% vs 7.1% previously
Chinese GDP: 3.2% vs -6.8% previously
UK Claimant Count: -28.1k vs 566.4k previously
UK Average Earnings: -0.3% vs 1.0% previously
BoE Credit Conditions Survey: 9.30am
ECB Monetary Policy Statement: 12.45pm
ECB Press Conference: 1.30pm
US Retail and Core Retail Sales: 1.30pm
US Weekly Jobless Claims: 1.30pm

Interbank rates:

GBP/USD: 1.2550
GBP/EUR: 1.1002
EUR/USD: 1.1400
USD/CAD: 1.3510