Morning Report – Monday 17th August

Main Headlines

Britons bought and sold a record number of homes between the middle of July and early August as pent-up demand from the coronavirus lockdown and a desire to leave London bucked the usual summer slowdown, industry data showed on Monday. Property website Rightmove, which says it is used by 90% of British estate agents, reported the highest number of home sales agreed since it began tracking the data more than 10 years ago, with transactions more than 20% higher than the previous record.

Citi’s $900 Million ‘clerical error’ Is worst Wall Street in a long time. Last Wednesday, loan operations staff at the New York bank wired $900 million, seemingly on behalf of Revlon Inc., to lenders of the troubled cosmetics giant controlled by billionaire Ron Perelman. One financier involved likened the surprise payment to finding a fortune on the sidewalk. And, as of late Friday, several hedge funds who claim Revlon was in default on the loan were showing no signs that they’ll be giving Citigroup its money back.

The Shanghai Composite was more than 2% higher after the People’s Bank of China boosted liquidity in the financial system to support banks. Hong Kong also rose. Equities in Japan and Australia were lower along with European equity futures. S&P 500 contracts rose and crude oil climbed. Treasuries ticked up.

GBP

The pound has continued to be supported against the dollar and is flat against most other currencies amid thin August trading. Inflation data due to be released on Wednesday and Retail sales due on Friday are both expected to be below forecast.

EUR

Germany’s economy is expected to expand strongly in the third quarter, but is set for a lengthy recovery process, according to a government report published on Friday. Gross domestic product will “recover strongly” in the third quarter after an historic collapse in the months between April and June, the economy ministry said in the monthly report.

USD

The dollar slipped marginally overnight and commodity currencies inched higher this morning as investors were relieved by a delay in the review of the U.S.-China trade pact which left the deal intact. The moves in the Asia session were modest, as weak data and uncertainty ahead of a week that includes Federal Reserve minutes and the Democrats’ nomination convention kept a lid on sentiment.