Morning Report – Thursday 23rd July

Main Headlines

Chinese state television is taking Premier League matches off the air, according to reports, drawing football into the increasingly fraught relations between China and the U.K. A match between Liverpool and Chelsea wasn’t aired as planned yesterday and weekend matches are no longer included in CCTV’s program schedule. Last year, CCTV dropped coverage of NBA matches after a team official made comments supporting pro democracy protesters in Hong Kong.

Global markets lost momentum amid renewed US-China tensions and uncertainty over the timing of a new US stimulus package. S&P 500 and FTSE 100 futures were little changed along with Asian stocks, with Tokyo’s holiday adding to the low liquidity. Chinese equities slid. Treasuries have yet to trade. Gold slipped and oil rose.

GBP

Sterling lost ground versus the dollar and euro yesterday, driven by a report in the Financial Times that the British government has abandoned hopes of clinching a free trade deal with the United States by the end of the year and concerns the Brexit transition period will expire without a deal between Britain and the EU.

EUR

The euro has held onto gains and is trading close to a two year high against the dollar shrugging off concerns about US-China tensions. The mood remained largely optimistic, however, following the EU’s agreement on a €750 billion recovery fund to share the debts incurred during the coronavirus crisis, with the euro up for a fourth straight day against the greenback.

USD

The dollar crept off milestone lows against other majors this morning and held on to gains against the yuan, as heightened Sino-U.S. tensions kept currency markets cautious. The United States gave China until Friday to close its consulate in Houston amid accusations of spying, and President Donald Trump said it was “always possible” other Chinese missions could be ordered to close as well. The U.S. Federal Reserve is scheduled to hold a two-day policy meeting next week, in which it is expected to keep interest rates near zero as it seeks to support an economy battered by coronavirus lockdowns.

Main Economic Data/Central Banks/Government (All times CET)

7:00 a.m.: Germany August GfK Consumer Confidence
7:45 a.m.: France July Business, Manufacturing Confidence
8:30 a.m.: Sweden June Unemployment
10:00 a.m.: ECB’s Guindos participates in online conference
11:00 a.m.: U.K. July CBI Trends Total Orders
12:00 p.m.: Turkey rate decision
12:00 p.m.: BOE’s Haskel speaks
12:30 p.m.: U.S. Initial Jobless Claims
2:00 p.m.: South Africa inflation expectations survey
3:00 p.m.: Euro-area July Consumer Confidence
South Africa rate decision