Morning Report – Wednesday 21st October

Main Headlines

The White House and Congressional Democrats decided to continue fiscal stimulus negotiations this week, after enough progress was made on Tuesday. There are still key differences that remain, and Mitch McConnell said that a deal could disrupt the Supreme Court nomination.

Greater Manchester will be placed into a Tier 3 lockdown, as of Thursday at midnight, much to the dismay of Andy Burnham, who found out live on TV. The Government has given £22 million to safeguard jobs after originally offering £60 million which was turned down by Burnham, who wanted no less than £65 million.

Brexit talks between David Frost and Michel Barnier continued yesterday, and they are set to meet in person on Thursday. Many on the European side are not fazed by what they describe as political posturing by Johnson to sell a deal to euro-sceptics at home. Michael Gove told 250 business leaders to step up preparations in case of a no-deal Brexit.

GBP

The pound is higher against the dollar and flat against the euro in early morning trading today. UK CPI and RPI inflation was released early this morning, and came in higher than September’s -0.4% at 0.4%, only marginally lower than the estimate of 0.5%. Unofficial Brexit talks are also set to resume today.

EUR

The euro is appreciating against the dollar to 1-month highs in early morning trading today. The EU’s virus bond issue recurved €233 billion of bids, making it the largest over order book in global bond market history. Today is light on the economic data front, but Christine Lagarde will be speaking this morning on the EU economy.

USD

The dollar has fallen to one month lows against most major currencies as renewed optimism for a fiscal stimulus package increases. Global equities also rose, although they failed to carry any consistent momentum. The fiscal stimulus talks will continue this week, and Friday is the new soft deadline for a bill to be agreed.

Main Economic Data/Central Banks/Government (All times BST)
7:00 a.m.: U.K. Sept. CPI, RPI, PPI, Public Finances
8:30 a.m.: Lagarde, Lane in ECB Listens event
9:30 a.m.: U.K. Sept. House Price Index
11:00 p.m.: ECB’s Guindos speaks (and again at 5 p.m.)
1:10 p.m.: BOE’s Ramsden speaks
2:55 p.m.: ECB’s Lane speaks
3:30 p.m.: EIA oil inventories