Mixed messages 2

Today’s news headlines:

‘US weekly jobless claims of 1.3m show gradual improvement’. The number of applications for unemployment benefits in the US fell once again last week, but at a slower pace than previous weeks. The numbers reflect that lay-offs have continued as businesses continue to grapple with the fallout of the coronavirus pandemic. Meanwhile, many of the larger states have put the brakes on reopening their economies due to a surge in virus cases, meaning that the level of unemployment is likely to persist until a truer reopening can occur. (Financial Times)

‘Sunak will not be able to play Santa Claus forever’. The Chancellor’s summer statement decisions are likely to push the budget deficit up to £361.5bn according to the FT’s calculations, a figure more than six times the deficit forecasted in March. Mr Sunak’s announcement was intending to protect and create jobs, but could take the overall budget deficit to levels not seen since 1944-45—over 18% of gross GDP. (Financial Times)

Today's events, rates, and data 

  • The US Dollar and Japanese Yen both gained overnight as a surge in new coronavirus cases in the US and further afield undermined hopes for a quick economic turnaround. Oil slipped along with US equity futures. In Asia, Hong Kong stocks were worst hit, falling more than 2% as a spike in infections left the government set to close schools.

Today's events

French Industrial Production: 19.6% vs -20.6% previously
Italian Industrial Production: 9.00am
Canadian Employment Change: 1.30pm
Canadian Unemployment Rate: 1.30pm
US PPI and Core PPI: 1.30pm

Interbank rates:

GBP/USD: 1.2580
GBP/EUR: 1.1172
EUR/USD: 1.1260
USD/CAD: 1.3625