Good Morning,

UK Unemployment numbers came in, with a pleasant surprise. We say this knowing that the end of furlough could bring a tidal wave of redundancies, but for the time being, unemployment ‘only’ rose by 114,000 people in the month of June, which wasn’t enough to move the dial from 3.9%. Economists are suggesting a peak of 7% in the winter as furlough unwinds, but with a lot of caveats to those predictions, most notably a second spike/lockdown.

Another positive number out of the UK is consumer spending, which was just 2.6% lower in July 2020 than July 2019, according to Barclaycard data. The number is better than many had expected and is being attributed to the re-opening happening during a period of good weather, meaning it was easier to be outside and spend money. The big winners in this are still those retailers specialising in home improvements, with furniture and DIY retailers having a great time of it.

The FT are reporting that the UK-Japan trade deal has come to a halt because Liz Truss is adamant that stilton cheese should be brought into the mix. The trade secretary is keen to get that particular item into the deal as it would be a one-up on Europe, who thrashed out a ‘cars for cheese’ trade deal last year. The sticking point on getting the deal done is said to be individual food item tariffs, but if that hurdle can be overcome, then this should be signed by the end of this month.

In Europe: France ad Spain are seeing some covid numbers that don’t make for particularly encouraging reading, Spain’s cases have now surpassed that of the UK, with more than 322,000 cases to the UK’s 311,000. Spain reported almost 1,500 new cases yesterday, almost double that of the UK. Madrid has said that their response to the virus is adequate, but questions have been asked over their efficacy of their track and trace system.
France meanwhile, has seen it’s first rise in hospitalised patients since the end of lockdown, up by 34 to 5,045 people. Their peak hospitalisations was in mid-April with more than 32,000 people. The amount of reported cases is rising on a daily basis too, with almost 5,000 new cases in the last three days – meaning reports that Boris is likely to add France to the quarantine list are probably true.

France and the UK are set to hold talks today over the increase in migrant boat crossings, which for all of the talk of wanting to find common ground and mutual solutions, it’s going to come down to one thing; money. If the UK is willing to give millions of Pounds, then the French will get to work on the problem. If they don’t then it’s likely to continue. The number of people making the crossing is as high as it has ever been, with organized crime facilitating the crossings and the run of good weather making it a pretty straight forward crossing.

Across the Pond: Trump looked like a deer in the headlights yesterday as he was walked out of a press conference by the secret service after they’d shot an armed individual in the vicinity of the White House. Trump was back at the briefing shortly thereafter. An interesting observation by Politico about Trump’s press briefings of late is that they’re become shorter, more on message and less confrontational with reporters -particularly female reporters who traditionally he has sparred with more so than men (sparring is perhaps the wrong word; he gets flustered, shouts fake news and tries to move on). The change in tone is likely to be at the behest of his election campaign managers, who see this as being detrimental to his broader appeal, something he needs to work on as his base looks to be outnumbered in the polls.

Biden now leads by comfortable margins in the key swing states of Pennsylvania and Wisconsin and voters in those states overwhelmingly think that things are going badly in the US at the moment 75-25 (who are the 25% that think this is what good looks like?!) There’s another poll to take note of though and that’s one that says 59% of likely US voters believe that Joe Biden’s running mate will end up being president within the first term of office. Mr Biden has previously said that he wouldn’t want to serve two terms, but for that amount of people to think it’ll be less than one term means that there’s even more pressure to get the choice of would be VP right. We should hear in the next couple of days who he’s chosen, with the front runners being Kamala Harris, Susan Rice and Gretchen Whitmer – meaning that if that is the case, the US could see its first female president within the next few years.

Today’s data highlight was UK unemployment, so with that out of the way we’ll keep half an eye on the German ZEW index out at 10am an then just wait and see what summer trading volumes have to offer. Stock markets have started the day higher, particularly the FTSE, so we’ll wait and watch as to whether this trend continues.

Be well.

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