Refinitiv Newscasts - UK Day Ahead: Market reaction to Johnson presser; final PMIs
30/09/2020 15:30
Click the following link to watch video: https://share.insider.thomsonreuters.com/link?entryId=1_gmo9o9ob&referenceId=1_gmo9o9ob&pageId=ReutersNews Source: Reuters Insider Description: UK Prime Minister Boris Johnson will hold a press conference later on Wednesday on the UK's latest efforts to combat coronavirus, with the spread of coronavirus denting market sentiment globally. On the economic calendar final manufacturing PMIs are due out for major European economies. Short Link: https://refini.tv/2EJNenE Video Transcript: Good afternoon. I'm Elena Casas. Welcome to your wrap up of the day's top news and an insight into Thursday. European Central Bank President Christine Lagarde set the scene for changing the ECB's strategy to align it with that of the Federal Reserve, possibly including a commitment to let inflation overshoot. Inflation in the Eurozone has missed the ECB's target of close to 2% for years despite increasingly aggressive stimulus from the central bank. In her first update on the ECB's ongoing review of its strategy, Lagarde also opened the door to giving the central bank less time to achieve its elusive goal. The wider discussion today, though, is whether central banks should commit to explicitly make up for inflation misses when they have spent quite some time below the inflation goals. If credible, such a strategy can strengthen the capacity of monetary policy to stabilize the economy when faced with lower bound. And this is because the promise of inflation overshooting raises inflation expectations and, therefore, lowers real interest rates. Germany's economic picture continues to improve. The number of jobless in Germany fell for the third month in a row in September, down 8,000 in seasonally-adjusted terms. The jobless rate fell to 6.3% from 6.4% the month earlier. Data out the same day showed retail sales rose a much stronger than expected 3.1% in August. Both figures the latest positive sign for household spending, which is expected to drive a recovery in Europe's largest economy. But, speaking at a budget debate in Berlin today, Chancellor Angela Merkel warned against complacency. We see now that autumn is coming- a difficult phase is ahead. The more difficult months of the year are coming now. The number of infection cases is on the rise. Let's take a look at how markets stand as we head into the close then. European markets have recovered from steeper losses earlier in the day that came on the back of a chaotic first US presidential debate. Markets got a boost after second quarter GDP numbers out of the United States showed the economy contracted less than initially forecast. UK Prime Minister Boris Johnson is to deliver a briefing on new coronavirus restrictions later today, after moves by rebel Tory MPs to give Parliament more power over those measures were thwarted. Up to a 100 conservative MPs have been ready to support an amendment giving Parliament the ability to vote on a new social distancing rules, that Speaker Lindsay Hoyle couldn't select it for procedural reasons. He accused the government of treating the House of Commons with contempt. The way which the government has exercised its powers to make secondary legislation during this crisis has been totally unsatisfactory. All too often, important statutory instruments have been published a matter of hours before they come into force. And some explanations why important measures have come into effect before they can be laid before this House has been unconvincing and shows a total disregard for the House. And on the economic front on Thursday, final factory PMI data is due out for all major European economies. The preliminary data for September showed a continued expansion following the lockdown-induced contraction. Germany led the pack with a positive reading of 56.6. And, also out on Thursday, Eurozone unemployment data is expected to show the jobless rate climbing to 8.1% in August from 7.9% the month before. And that's it for now. I'm Elena Casas, and this is Reuters