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How to plug the gaps

Today’s news headlines:

‘UK set to extend ban on evictions of commercial property tenants’. The current commercial tenant safeguards are set to expire at the end of September, which may force many struggling retail and services businesses into eviction proceedings following two quarters of dramatically lower footfall. The Prime Minister is preparing to extend these eviction bans for another quarter to give vulnerable businesses time to rebound from Q3 and Q4 return to growth. The British Property Federation Chief Executive Melanie Leech commented that the government should be looking at subsidising commercial rents rather than forcing losses on property investors. (Financial Times)

‘UK labour market sheds 695,000 jobs between March and August’. This morning we saw claimant count data released for the UK, which explained 700,000 job losses since the start of lockdown and August. The unemployment rate also rose to 4.1%, but the furlough scheme occludes the employment picture somewhat, though we are starting to see some more modest losses as we approach the end of the scheme in October. (Financial Times)

Today's events, rates, and data 

  • After a light day of data, little movement was recorded in yesterday's session. This morning we’ve already seen upbeat data out of China and poor employment data out of the UK, but the real focus for today will be on EU sentiment and US Industrial Production. From a currency perspective, USD and EUR are at the bottom and top of their respective ranges with faltering momentum recorded in recent sessions. Without a strong catalyst today, it's difficult to see an opportunity for both currencies to meaningfully break out of their ranges.

Today's events

CN  Fixed Asset Investment ytd/y: -0.3% vs -1.6% last month
CN  Industrial Production y/y: 5.6% vs 4.8% last month
CN  Retail Sales y/y: 0.5% vs -1.1% last month
CN  Unemployment Rate: 5.6% vs 5.7% last month
UK  Claimant Count Change: 73.7k vs 69.9k last month
UK  Average Earnings Index 3m/y: -1.0% vs -1.2% last month
UK  Unemployment Rate: 4.1% vs 3.9% last month
EU  ZEW Economic Sentiment: 10:00 AM
EU  German ZEW Economic Sentiment: 10:00 AM
US  Empire State Manufacturing Index: 1:30 PM
US  Capacity Utilisation Rate: 2:15 PM
US  Industrial Production m/m: 2:15 PM

Interbank rates:

GBP/USD – 1.2855
GBP/EUR – 1.0820
EUR/USD – 1.1875
USD/CAD – 1.3160