Morning Report – Monday 3rd August

Main Headlines

Boris Johnson’s inner circle is considering a plan to seal off London and order at risk members of the population to stay home as a worst case scenario if virus infections spike, the Sunday Times reported. Local Government Secretary Robert Jenrick said restrictions adopted in the northwest of England show the government will act where and when it’s necessary with a targeted approach. “We will restrict in certain areas,” he told Times Radio.

Global markets are trading in typical summer fashion as most asset classes lacked direction at the beginning of August. Asian markets were mixed, with Japanese and Chinese stocks bucking a downdraft as the latter gained amid strong Caixin PMI data. Nasdaq futures extended an advance after leading a rally on Wall Street, but Dow contracts dropped. Treasuries edged lower, while the dollar was steady. Oil dropped. Gold futures rose to another record.

GBP

The pound posted its biggest monthly rise in more than a decade last month as a broad based dollar decline fuelled demand for the British currency. However, concerns of a second wave of infections, a weak economy and growing pressure to strike a Brexit trade deal before a transition period ends in December are prompting investors to become wary of the currency’s prospects in coming months.

EUR

The euro has retraced from two year highs. The common currency hit significant resistance on some technical signs of being over bought in the near-term, and with speculators long positions hitting a record levels.

USD

The U.S. dollar has made early gains this morning after a brief rebound late last week. Mounting concerns about a slowing U.S. economic recovery from the coronavirus pandemic will keep the dollar in focus over the coming weeks.
Main Economic Data/Central Banks/Government (All Times CET)
7:30 a.m.: Switzerland July inflation
8:15 a.m.: Spain July manufacturing PMI
8:30 a.m.: Switzerland July manufacturing PMI
8:45 a.m.: Italy July manufacturing PMI
10:30 a.m.: Germany sells bonds
1:50 p.m.: France sells bonds
Bank of Russia releases quarterly monetary report

Corporate Events

Earnings include Belimo, CNP Assurances, Ferrari, Hochtief, Heineken, Hiscox, MTU Aero Engines, Natixis, SocGen, UBI