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Risk in demand

Today’s news headlines:

‘Fed’s Bullard says risk of financial crisis remains’. James Bullard, President of the Federal Reserve Bank of St Louis, rationalised the central bank’s continued support of financial markets, citing that a wave of business failures could still trigger a financial crisis. Fed officials are weighing up the potential economic impact of the reclosure of California and New York, amongst other large states, but have previously been criticised for going too far in its efforts to stabilise markets. (Financial Times)

‘Businesses in Hong Kong fear collateral damage from security law’. Businesses in the supposedly autonomous region are worried that China’s new security law will discourage executives from even transiting through the region, let alone doing business there. This is because the law allows security agencies to arrest foreign nationals and send them to the Chinese mainland for trial, where penalties include life imprisonment. Meanwhile, other businesses have accepted that the law could bring greater stability after a year of pro-democracy protests in the financial hub. (Financial Times)

Today's events, rates, and data 

  • Risk assets were back on the climb yesterday and overnight as European and US futures rose along with Asian equities. Sterling gained against the Dollar after the effects of month-end Dollar demand wore off. Other risk currencies gained along with oil.

Today's events

Aussie Trade Balance: 8.03B vs 7.83B previously
European PPI: 10.00am
European Unemployment Rate: 10.00am
US Non-Farm Employment Change: 1.30pm
US Unemployment Rate: 1.30pm
US Average Hourly Earnings: 1.30pm
Canadian Trade Balance: 1.30pm
Canadian Manufacturing PMI: 2.30pm

Interbank rates:

GBP/USD: 1.2485
GBP/EUR: 1.1080
EUR/USD: 1.1265
USD/CAD: 1.3600