Sterling gained 1% or so on the euro overnight, continuing this morning as retail sales grew by 3.6% between June and July. Indeed retail sales were higher than in February, before the pandemic began. This makes is less likely that interest rates will be cut further and hence was supportive of the pound.
Although supporting the idea of a V-shaped recovery, the UK government debt has now reached £2tn for the first time. We eagerly await “flash” PMI at 9.30am.
The ‘air bridge’ between the UK and Portugal was reopened – but closed between the UK and Croatia, Jamaica and Austria.
Today we will get an update on Brexit trade talks. Don’t expect any major breakthroughs, but GBP/EUR could move in reaction to the general tone of the announcements through today.
In the US, Joe Biden has formally accepted the Democrat nomination and on current polling will be elected President in less than 11 weeks. It could be a long 11 weeks though.
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