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Global Market Watch - 25th September 2020

Chancellor Sunak announced a new ‘job support scheme’ to replace the furlough system, which will be a lot cheaper than its predecessor and more along the lines of Germany’s six-month wage subsidy. When he announced the scheme, the Chancellor did say he ‘cannot save every job.’ The pound managed to gain some support against the dollar and euro on this. Today, we have the Bank of England’s quarterly bulletin, but it is dollar demand that is driving GBP/USD lower.
The euro was under pressure yesterday but slipped only 0.2%, as the German IFO institute reading was pretty much as expected, as they said that German industry was continuing to recover, with export expectations improving significantly. The SNB interest rate decision saw interest rates kept at a negative 0.75%. In addition to this, SNB Chairman, Jordan, said the SNB’s interventions have had an impact against the upward pressure on the Swiss franc.

The Nasdaq started yesterday trading lower, with Fed’s Rosengren saying there are ‘headwinds ahead for the US economy.’ As if to underline this, the US weekly jobless claims rose to 870k last week. The Republicans are now reported to be happy to agree a stimulus bill worth $1.5 trillion. It is still $1 trillion below what the Democrats will agree to.  
The AUD continued its decline and fell around 1% against the US dollar in risk-off trading. Interestingly, the Turkish central bank raised interest rates as inflation is rising, and the TKY strengthened on this surprising news.

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