Update -

Treasury Market Commentary

A weekly economic update from our Treasury team.


28th August 2020


Macro Commentary

US equities this week have hit record highs, on hopes of an improvement in its trade relations with China. However, reports of the Chinese launching missiles into the disputed South China Sea are obviously cause for concern.

The governor of the US central bank, Jerome Powell, said yesterday that the Fed will adjust its policy strategy, resulting in interest rates likely to stay at extremely low levels for longer. 

The Republicans look set to propose a smaller support package of $500bn to help the US economy, with the delay in reaching an agreement continuing to hurt the dollar.

In Europe, the Brexit talks continue to make no tangible progress, with very little time now ahead of the initial October deadline.

Increasing fears of a second wave of the virus remain a real concern, with an upsurge of cases in France, Spain and Italy.
On the exchanges, sterling strength continues, particularly against the US dollar.

GBP/USD is currently trading near its year-to-date highs just ahead of 1.3300. There is some very strong selling interest in the region of 1.3400 – 1.3500, whilst the initial support comes in at 1.3000.

GBP/EUR is near its 1-month high just ahead of 1.1200, with the significant 1.1250 barrier now coming into focus. Support remains at 1.1000.

GBP/USD 1-year chart

GBP/USD 1-year chart


Week Ahead

Date Release Last Expected*
1/9/20 UK Markit Manufacturing PMI SA 55.3 55.3
1/9/20 EU Unemployment Rate 7.8% 8.0%
2/9/20 UK Nationwide House Price NSA YoY 1.5% 2.0%
3/9/20 UK Markit/CIPS Services PMI 60.1 60.1
3/9/20 UK Markit/CIPS Composite PMI 60.3 60.3
4/9/20 UK Markit/CIPS Construction PMI 59.1 59.0
4/9/20 US Nonfarm Payrolls 1763k 1518k

*Bloomberg survey / Not available 

Foreign Exchange

Currency Last Currency Last
EUR/USD 1.1890 AUD/USD 0.7310
GBP/USD 1.3280 USD/AED 3.6730
GBP/EUR 1.1165 GBP/AED 4.8800
USD/CHF 0.9040 EUR/AED 4.3670
USD/JPY 106.10 XAU/USD 1950

Equity Indices

Indices Previous Close YTD % Change
FTSE 100 6012 -20.29%
S&P 3484 +7.85%
EUROSTOXX 3229 -11.11%
DFM GENERAL INDEX 2269 -17.91%

UK Benchmark Rates

Libor Swap Mid
3 month 0.06513% 2 year 0.13%
6 month 0.11588% 3 year 0.17%
12 month 0.24475% 5 year 0.28%

View Arbuthnot Latham’s Private and Commercial deposit rates.

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