Trump blames Democrats for Covid-19 stimulus delay.
Despite positive consumer inflation data yesterday the US dollar slid against both the Euro and Sterling. The dollar fell on Thursday amid fading hopes that a compromise will occur between Republicans and Democrats over additional stimulus for the economy. President Donald Trump has accused congressional Democrats on Wednesday of not wanting to negotiate the US coronavirus aid package.
Although market sentiment has swung between optimism and pessimism, analysts see the most likely outcome being more stimulus as without it the US recovery would likely falter.
Britain’s economy shrank by a record 20.4% in the second quarter – a substantially bigger slump than in the euro zone (12.1%) or United States (9.5%), data on Wednesday showed. This contraction was largely priced in by market participants despite it dwarfing any decline previously seen in the UK.
Investor sentiment around sterling is still generally bearish, unemployment is expected to rise further as the furlough scheme is wound down forcing more employers to lay off staff. Given that the rally we have seen in the cable rate is centred around dollar weakness there will be considerable attention on up coming UK data.
|12:01||RICS House Price Balance||-5%||-13%|
|02:00||MI Inflation Expectations||-||3.20%|
|07:00||German Final CPI m/m||-0.50%||-0.50%|
|N/A||German WPI m/m||0.40%||0.60%|
|N/A||Import Prices m/m||0.60%||1.40%|
|15:30||Natural Gas Storage||51B||33B|
|18:01||30-y Bond Auction||-||1.33|2.5|
|23:30||BusinessNZ Manufacturing Index||-||56.3|