Morning Report – Tuesday 11th August

Main Headlines

U.K. employment fell by the most since the global financial crisis at the height of the nation’s lockdown, as the number of Britons with jobs tumbled by 220,000. The second-quarter figures, covering the period that saw coronavirus restrictions at their most severe, are a taste of a labour market crisis that’s expected to gather pace as government support is gradually withdrawn from this month.

Asian stocks rose the most in a week overnight after a drop in coronavirus hospital admissions in some U.S. states, even as global cases topped 20 million. Japanese and Hong Kong equities rallied more than 2%. Shares advanced in Australia and South Korea. S&P 500 futures climbed, putting the benchmark on course to approach its all-time high from February. The tech-heavy Nasdaq 100 lost ground. Yields on 10-year Treasuries hovered near two week highs.

GBP

Sterling gained against a slightly stronger dollar yesterday after failing to hold onto last week’s five month high posted last week. UK unemployment and GDP data duethis week could provide some short term volatility however, the pound is most likely to be led by movements in other currencies even if economic data surprises in line with what happened in the rest of the world.

EUR

Investor morale in the euro zone rose for a fourth consecutive month in August but the low reading suggests that the coronavirus hit economy is still in recession in the third quarter, a survey showed yesterday. Sentix’s index for the euro zone improved to -13.4 from -18.2 in July. That was its highest reading since pre-lockdown times.

USD

The dollar held overnight gains following seven weeks of an almost relentless sell off as investors clung to hopes of a bipartisan stimulus deal in Washington and U.S. bond yields rebounded from multi-month lows. U.S. congressional leaders and Trump administration officials said yesterday they were ready to resume negotiations on a coronavirus aid deal, although it was unclear whether Democrats and Republicans would be able to bridge their differences.

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

9:30 a.m.: UK Unemployment
9:30 a.m.: UK Claimant Count Rate
10:00 a.m.: Germany ZEW
1:30 p.m.: US Producer Prices
1:30 p.m.: US PPI Inflation