Markets enter the new week again under the shadow of the Covid19 pandemic and the Sino-US tensions.
Sino-US tensions
US President Donald Trump signaled that he was ready to ban popular Chinese social media software TikTok and WeChat at any time, as Microsoft started to negotiate a potential purchase with Chinese owners of TikTok.
Trump talked to Microsoft’s CEO about the issue on Sunday.
The Chinese Foreign Ministry accused the United States of discriminatory treatment of Chinese companies on Monday.
Two major economies of the world have are now in a perfect conflict over trade, technology, the status of the city of Hong Kong, the South China Sea dispute, the CCP’s assimilationist campaign targeting the predominantly Muslim Uighur people in the Xinjiang Autonomous Region, Tibet, the security of the island of Taiwan, and North Korea.
US aid package
In the US Congress, Republicans and Democrats continue to seek common ground to approve more financial support to the economy and restore unemployment payments that ended last week.
Economists are concerned that ending or reducing government financial support and stimulus will reduce consumption and create a potential housing crisis in the US.
Congressional Democratic leaders and the Trump administration team continued their negotiations on the weekend but failed to to find common ground.
UK-US trade talks
UK Trade Secretary Liz Truss is in Washington for the third round of a new trade deal negotiations between her country and the US after Brexit.
Truss will meet with senior commercial officials, including US Trade Representative Robert Lighthizer.
At the meeting with Americans, she is expected to express her fierce criticism of the “punitive” new tariff that the United States put on British goods in the past few weeks.
BoE
The Bank of England meets on Thursday. After the quantitative easing worth £100 billion which it announced in June and which would be sufficient until the end of the year, no monetary policy changes are expected from the bank.
However, analysts will be looking for clues about the pace of purchases for the rest of 2020. The market will also be looking for signals about the bank’s attitude towards negative interest rates.
RBA
The Australian Central Bank (RBA) meets on Tuesday. RBA Governor Philip Lowe has ruled out negative interest rates. The strength of the Australian dollar, however, bothers central bankers. In addition, the Aussie economy saw deflation for the first time in 22 years.
In Melbourne, the capital of the state of Victoria and the second-largest city in Australia with a population of 5 million a curfew begins at night today after the local government declared an emergency as part of its anti-COVID19 restrictions.
US employment
US non-farm employment and unemployment rate data for July are to be released on Friday.
Employment is expected to have increased in July in the world’s largest and worst-hit economy where a record 4.8 million jobs were created in June. However, this time the expectations are between 1 million 500 and 750 thousand.
Economic Calendar
Monday: US ISM Manufacturing PMI, Canada — Civic Holiday
Tuesday: Australia Retail Sales, RBA Interest Rate Decision, RBA Rate Statement, New Zealand Employment Change
Wednesday: UK Composite PMI, UK Services PMI, US ADP Nonfarm Employment Change, US ISM Non-Manufacturing PMI, US Crude Oil Inventories
Thursday: BoE Inflation Report, BoE Interest Rate Decision, BoE MPC Meeting Minutes, UK Construction PMI, BoE Governor Bailey Speaks, US Initial Jobless Claims
Friday: US Nonfarm Payrolls, US Unemployment Rate, Canada Employment Change, Canada Ivey PMI
