The market is closely anticipating any announcement by the UK government regarding further lockdown restrictions as the current restrictions in place will expire on Thursday. There are rumours that Conservative party donors have voiced their concerns and want Prime Minister Johnson to reopen the economy as soon as possible as well as extend the Brexit transition period deadline beyond the end of December. This is giving the Pound some support, although it has weakened since Friday against the Euro and the Dollar. UK-US trade negotiations are due to start tomorrow and comments from either party will be closely scrutinized.

The number of daily deaths in Spain, Italy and France have fallen to its lowest levels in weeks, giving the Euro a slight boost against the Dollar and the Pound. Eurozone final manufacturing PMI came out slightly better than expected this morning. Investor confidence data was also released shortly after and disappointed with a reading much below anticipated. The ECB’s chief economist Lane has predicted that it will take 3 years for the Eurozone to fully recover economically from the coronavirus pandemic. Germany now accounts for half of all state aid approved by the European Commission, which has led to other countries such as Spain and Italy to complain as they believe this gives Germany an unfair advantage that will help them recover quickly from the pandemic.

On Friday, ISM manufacturing PMI data came out better than anticipated but still indicated contraction in the industry with its lowest reading since April 2009. The Dollar has strengthened due to its safe-haven status as there are concerns that a second spike could happen when countries around the world reopen and also because President Trump has warned that China may face additional tariffs because of the way they handled the outbreak. US Secretary of State Pompeo has suggested that there is ‘significant’ evidence to suggest that Covid-19 originated from a lab in the Chinese city of Wuhan. Overall, the Dollar remains strong as further friction between the US and China is anticipated.