Rose tinted glasses

Today’s news headlines:

  • ‘Stocks rise as possible COVID-19 treatment buoys investors’  Yesterday Gilead, the maker of Remdesivir, published a drug trial that points to effective treatment of the corona virus.  This is by no means a final determination – more like a hopeful sign – but markets has taken that as a strong catalyst for further catalyst for optimism.  (Financial Times)

  • ‘Grim Powell sets Fed up for the long haul’  While the Fed is already set to zero interest rates and is expanding its asset purchases, it appears the Fed chairman, Powell, believes they make have to act further to support the US economy.  While the Fed hasn’t strengthened its guidance on policy, their broadly negative comments suggest they will remain in firefighting capacity for longer than previously thought.  (Financial Times)

Today's events, rates, and data 

  • The market continues its rally for yet another day, despite some rather dastardly GDP releases from the US and EU yesterday.  The focus remains on the timing of reopening economies for business after Germany was forced to reverse its position in the face of a viral relapse.  Today's early data releases also paint a pretty dire picture of consumer spending which should caution markets against excessive optimism yet seems to be falling on deaf ears.

Today's events

JP Industrial Production                          -3.7% vs -0.3% last month
JP Retail Sales                                       -4.6% vs 1.6% last month
CN Manfacturing PMI                              50.8 vs 52.0 last month
CN Non-manufacturing PMI                    53.2 vs 52.3 last month 
CN Caixin Manufacturing PMI                 49.4 vs 50.1 last month
JP Consumer Confidence                        21.6 vs 30.9 last month
French flash GDP                                    -5.8% vs -0.15 last quarter
French Consumer Spending                   -17.9% vvs -0.5% last month
Spanish flash GDP                                  -5.2% vs 0.4% last quarter
EU Prelim flash GDP                                10:00
ECB Policy Statement                               12:45
ECB Press Conference                             13:30
US Unemployment Claims                        13:30
US Chicago PMI                                        14:00

Interbank rates:

GBPUSD: 1.2450

GBPEUR: 1.1450

EURUSD: 1.0875