Yesterday, Prime Minister Johnson took questions from Parliament and the general public in order to provide more information on his ‘roadmap’ to easing lockdown restrictions. The Pound has lost ground as rumours emerged that some Cabinet ministers were not happy about the decision to quarantine travellers coming back into the UK for 14 days. The Bank of England’s Chief Economist Haldane has said that the coronavirus pandemic will permanently scar the UK economy leaving businesses with more debt and employees uneasy about job security.
There are also growing fears that post-Brexit trade negotiations could stall unless progress is made on key topics such as fishing. Ongoing negotiations will be closely looked at by the market, with any comments from either party likely to be scrutinized.
Yesterday, Eurozone industrial production data came out worse than expected at -28.4% compared to -20.0% that was predicted. This kept the Euro from making any significant gains against the Dollar. The Ifo institute has said that 39% of German automobile companies decided to cut jobs in April. The Bank of France has indicated that economic activity for the month of April dropped by 27% compared to 32% in March. Austrian Chancellor Kurz has aimed to show solidarity with Italy by refusing to blame them for the rise in coronavirus cases across the EU. He also believes that Italy would not be able to handle the amount of debt incurred without the EU.
President Trump has said that he is not interested in reopening phase 1 trade negotiations with China and wants to see if they will live up to their end of the trade deal. FOMC member Quarles believes that the strain seen in the financial markets has been eased by the actions of the Federal Reserve, although more action may need to be taken by the central bank. Several FOMC members will be making speeches today, and with speculation rising that interest rates in the US will be cut the market will pay close attention. The Dollar remains strong for the time being as new clusters of coronavirus outbreaks in Wuhan and South Korea have emerged after the easing of lockdown restrictions.