The day began with positive economic readings from the UK. Public borrowing in the United Kingdom was lower than expected at -25.9 billion pounds, while retail sales climbed to 1.4%, their highest since the beginning of the coronavirus pandemic. UK PMI reports were positive all across the board.
In Germany, the composite flash PMI dragged behind the forecast at 53.7, mostly held back by the services sector, which disappointed investors by being just 50.8, against a forecast of 55.1. The eurozone-wide PMI reports were also worse than expected, in large part because many countries in Europe have been implementing partial lockdown measures to keep Covid-19 outbreaks to the minimum.
These reports come on the back of news that the number of coronavirus cases in Europe is once more on the rise, with Spain and France suffering the biggest increases, followed by Germany and the United Kingdom.
News outlets in the United States are preoccupied with election coverage. This week the Democrat National Convention took place, where Joe Biden formally accepted the presidential nomination, and Kamala Harris accepted her VP spot.
Next week it will be President Donald Trump’s turn to get nominated by the Republican party and to give a speech of his own. As of now, the incumbent Trump is lagging behind in the polls, but with two months till the elections, anything is possible.
In other news, yesterday the markets took a hit as unemployment reports from the United States failed to deliver the desired results. The number of initial jobless claims jumped to 1.1 million after having dropped to 900k last week, with another decrease forecasted for yesterday’s report.
The continuing jobless claims report fared better than expected, but did little to soften the blow from the initial claims. The news that the US labor market might be recovering more slowly than desired hits especially hard considering the Federal Reserve did not promise any new stimulus in their most recent policy meeting.
