Hey big spender!
Today’s news headlines:
‘EU leaders strike deal on recovery fund after marathon summit’. Following a marathon negotiation, EU leaders have finally agreed upon a €750bn coronavirus recovery package, of which €390bn is intended to shore up weakened member countries. Opposition to the deal was led by the so-called frugal four (Austria, Denmark, the Netherlands, and Sweden) who paired down the amount of grants from the originally planned €500bn. A new payment brake mechanism was also agreed which would stop EU funding if a member country was seen to be breaking their promises. (Financial Times)
‘UK households experience biggest income shock since 1970s’. The coronavirus has resulted in the biggest household income hit since the oil crisis of the 1970s. According to the Resolution Foundation think tank, UK households have seen a fall of 4.5% in incomes over a three month period. More importantly, the effect had been regressive, impacting lower-income households more keenly. When the furlough scheme ends, we can expect unemployment to rise from the current half a million loss since March, which will further erode incomes. (Financial Times)
Today's events, rates, and data
Today is expected to be yet another dozing session with little economic data on the calendar, though numerous reports of relative economic recovery have been released (FT readers see this excellent article). State aid efforts remain the primary headlines and should continue to drive asset prices higher, maintaining broadly similar currency dynamics.
CA Retail Sales: 1:30PM
GBP/USD – 1.2700
GBP/EUR – 1.1100
EUR/USD – 1.1450
USD/CAD – 1.3500