Morning Report

Morning Report – Monday 5th October

Main Headlines

Donald Trump’s health “continues to improve” according to White House physician Sean Conley. This comes as conflicting reports say that Trump’s health was concerning over the weekend and that he needed supplementary oxygen twice. He could be released as early as this afternoon, but according to Trump, the “real test” of his condition will come over the next few days.

Nancy Pelosi, in an interview to CBS on Sunday, said that she was “making progress” in fiscal stimulus talks with US Treasury Secretary Steve Mnuchin. Trump amped up the pressure on both by tweeting that the US “wants & needs” stimulus on Saturday. Pelosi said on Sunday that the outcome could hinge on whether the Trump administration offers more funds for testing and tracing.

The ECB’s mixed messages has confused investors over the weekend. Christine Lagarde, European Central Bank President, has downplayed the severity of the euro appreciation and the risk of deflation as recently as last month, however ECB Chief Economist has subsequently published a blog which defies her key points. In recent days, ECB policy makers have been arguing whether more monetary policy easing is needed, further highlighting the split.

GBP

The pound is relatively flat in early morning trading against the dollar. This is most likely due to news that Brexit talks have once again stalled funnels into the market. This week, Brexit talks will continue as Boris Johnson and Ursula Von der Leyen spoke on Saturday and there remains key differences on fishing and state aid. Later today, UK PMIs will give a good test of economic sentiment.

EUR

The euro has gained strength in early morning trading against both the dollar and pound. The eurozone continues to increase Coronavirus restrictions as cases rise across the continent, especially in the Eastern bloc. PMIs are released for the major eurozone countries later today, and markets will be hoping that there is some sign of an economic recovery.

USD

The dollar fell against most major currencies in early morning trading as investors are turning to risk-on assets due to news that President Trump will be released from hospital and fiscal stimulus talks are going well. However, the dollar is gaining on the Japanese Yen, which is most notably known as a safe haven. Equities are continuing to rise, including the S&P 500 and Dow Jones.

Main Economic Data/Central Banks/Government (All Times BST)
7:00 a.m.: Russia Sept. Services, Composite PMIs
8:00 a.m.: Turkey Sept. Inflation
8:15 a.m.: Spain Sept. Services, Composite PMIs
8:45 a.m.: Italy Sept. Services, Composite PMIs
8:50 a.m.: France Sept. Services, Composite PMIs
8:55 a.m.: Germany Sept. Services, Composite PMIs
9:30 a.m.: U.K. Sept. Services, Composite PMIs
10:00 a.m.: Euro-area Retail Sales