Homegrown
12 October 2020
Plenty happening in the UK with more Covid-related restrictions, their impact on the economy, and how the Bank of England might react.
4 min read
12 Oct 2020
Economic Highlights
Welcome to our Economic Highlights, bringing you market updates from across the UK, US, Europe and China, as well as the FTSE weekly winners and losers.
UK
On a rolling 3-month basis to end August, GDP rose 8%, having fallen 6.8% in the previous 6 months (revised up from -7.6%). One sweet spot in the economy remains the housing market. Nationwide’s House Price Index was +2.3% to end July. September’s RICS House Price Balance (so not the house price, but balance of respondents reporting higher prices) was +61.
US
The Weekly Jobless Claims figure was a bit disappointing, with 840k people applying for unemployment benefits (f/c 820k). Continuing Claims were more reassuring, falling to 10.976 million from almost 12 million. The minutes from the latest Fed meeting revealed little new information. There seems to have been a strong consensus to firm up forward guidance about the duration of very low interest rates. While the Fed’s growth outlook is reasonably rosy, it is highly predicated on another fiscal support package being approved.
China
The yuan dipped slightly as the PBOC scrapped a requirement for banks to hold a reserve of yuan forward contracts, removing a guard against depreciation. This suggests that the government is relatively relaxed about the threat of large currency outflows, as well, perhaps, as signalling that it doesn’t want the yuan’s recent appreciation to persist much further.
Source: FactSet
Source: FactSet