Morning Report – Monday 29th June

Main Headlines

Global cases of Covid-19 set a new daily record as the cumulative total surged past 10 million, a warning to health experts and world leaders who hoped the virus would fade in the summer heat. In the U.S., Arkansas became the latest state to halt the process of reopening its economy as infections scorched the South and West. Former CDC chief Tom Frieden criticised some state leaders for reopening too soon. “This is going to continue to get worse for weeks,” he said.

Stocks got off to a shaky start with Asian equities tracking Wall Street’s losses on Friday. The Nikkei 225 slid 2% and Chinese markets fell after a two day holiday despite upbeat data on industrial profits. U.S. and European futures posted milder losses, Treasuries held on to gains. Gold was steady. Oil tumbled, with WTI falling below $38 a barrel.

Diageo counted itself among Patagonia, Verizon, Ben & Jerry’s, and Coca-Cola in saying it will halt ads because of hate speech and polarized politics appearing on the social network. Starbucks is suspending ads on all social media platforms, though it made no reference to the movement. Facebook and Twitter plunged after Unilever said it will stop advertising on both platforms for the rest of the year.

GBP

Sterling touched a one month low versus the dollar late last week, with doubts about whether Britain will seal a trade pact with the European Union set to be the biggest weight on the currency over the summer. The pound showed one of the worst monthly performances among major currencies in June, lagging the broader market.

EUR

The coronavirus pandemic means Germany needs to ready for “an extraordinary act of solidarity” with other European Union countries, Chancellor Angela Merkel said as Berlin prepares to take on the rotating EU presidency from July 1. In an interview with the Sueddeutsche Zeitung and five other European newspapers, Merkel called the pandemic a “challenge of unprecedented dimensions” and urged EU members to maintain their internal market “and to present a united front in the world”.

USD

The dollar struggled for support in early trade this morning as riskier currencies are moving higher, as investor sentiment swings between hopes for a global economic recovery and fears that a fresh wave of coronavirus cases could undermine the revival. California ordered some bars to close on Sunday, following similar moves in Texas and Florida, as cases nationwide soar to record levels. Washington state and the city of San Francisco have paused re-opening plans.

Main Economic Data/Central Banks/Government (All Times BST)

8:00 a.m.: Turkey June economic confidence
8:00 a.m.: Spain June CPI
9:30 a.m.: U.K. May mortgage approvals, consumer credit
10:00 a.m.: Euro-Area June economic, consumer confidence
10:30 a.m.: BOE’s Bailey, Breeden speak
10:30 a.m.: Germany sells bills
1:00 p.m.: Germany June CPI
1:00 p.m. ECB’s Makhlouf speaks
1:30 p.m.: BOE’s Vlieghe speaks
1:50 p.m.: France sells bills