Treasury Market Commentary
A weekly economic update from our Treasury team.
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
|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
|Indices||Previous Close||YTD % Change|
|DFM GENERAL INDEX||2269||-17.91%|
UK Benchmark Rates
|3 month||0.06513%||2 year||0.13%|
|6 month||0.11588%||3 year||0.17%|
|12 month||0.24475%||5 year||0.28%|
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Treasury Market Commentary
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