Open sesame

Today’s news headlines:

  • ‘Bankers were left in dark on size of Sunak loan plan’  Chancellor of the Exchequer, Rishi Sunak, apparently made a last minute change to the newly announced ‘bounce-back’ scheme which provides guaranteed loans to UK small business.  Initially the plan coordinated with banks was for a £25,000 limit, but Mr Sunak doubled the sum before the announcement, in clear sign of the UK’s economic fragility.  (Financial Times)

  • ‘European economic activity shows early signs of post-lockdown rise’  The European economies which have begun to loosen lockdown restrictions are starting to show signs of improvement. Tracking some unconventional metrics like electricity usage, store footfall and workplace commute indicators is providing a picture of a return to activity.  (Financial Times)

Today's events, rates, and data 

  • Overnight we’ve seen a move higher in so called risk assets in response to very early signs of a bounce back towards normality in opening economies. Oil price, which has only recently plumbed decade lows, is also modestly ticking higher on the brighter market sentiment.  Economic data remains dire (UK CBI realised sales came out at 2008 lows) but as countries begin announcing dates for easing of restrictions, markets are responding with optimism.

Today's events

AU trimmed mean CPI                   0.5% vs 0.5% last month
US Advanced GDP                        13:30
US Pending Home Sales               15:00
FOMC Statement                           19:00
Fed Press Conference                   19:30

Interbank rates:

GBPUSD: 1.2465

GBPEUR: 1.1475

EURUSD: 1.0860