Yesterday the UK government announced a new scheme which will see a location-based 3-tiered system, ranging from medium to very high. Most of the country has initially been set on ‘medium’ but Liverpool has concerningly been placed immediately onto ‘very high’.
The news filtered around the country throughout the day as PM Johnson announced these measures to Parliament, taking questions from across the benches. The Prime Minister then presented the new scheme to the nation during an evening address. While the markets took these developments in their stride (GBP positive on the day and FTSE flat) it is the national mood that will likely see the most volatility. On the one side, the hawks who believe the government is exaggerating and will do more damage to people’s lives and the economy via these restrictions. On the other side, the doves, who feel not enough is being done, and that we should have much firmer policies in place to slow down the spread and reduce the number of patients being admitted to already very busy hospitals. Either way, the national debate will rumble on.
Yesterday saw a risk-on tone across financial markets. US stocks drove the rally higher as investors become increasingly comfortable with either of the options on the table for the next President. The reality is, either President, Republican or Democrat, will regardless see waves of stimulus flood across the US in the following years. This prospect is hugely positive from a stock market perspective.
Today’s economic calendar sees UK employment, German ZEW sentiment, and, US inflation.
8:30am, October 13th 2020
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