Week in a Glance: US stimulus, UK GDP, pandemic and vaccines

17 авг. 2020 г.

The main event of recent weeks remains the stimulus package for the US economy, which Republicans and Democrats still cannot agree. After Trump issued a series of executive orders that cut off funding for a number of key points, the parties clearly decided that there is no need to rush. And over the entire past week, they have regressed rather than progressed in the negotiation process. With this approach, they can be in a deadlock for a long time: until September or even longer.

This is negative news for the dollar, especially considering that last week US retail sales and industrial production came out worse than experts expected.

By the way, China reported another decline in retail sales, which suggests that the country's consumer sector has not yet recovered from the consequences of the pandemic.

Meanwhile, the UK economy has officially entered a state of recession, demonstrating the highest decline in the country's history in the second quarter and becoming one of the worst in Europe (even worse than Spain with its -18%).

The situation with the pandemic in the United States has improved significantly over the week, but in the world, it continues to remain consistently difficult, as the improvement in the United States was offset by a worsening in other countries. The news that Russia has an effective vaccine for the day rocked the financial markets, but most developed countries said that there was no trust in it, and in the United States they generally noted that they would not even prick monkeys for testing purposes.

As for the coming week, in terms of statistics, it promises to be relatively calm. So, the markets will continue to follow the opposition between Republicans and Democrats, as well as the United States and China. In addition, another round of trade negotiations between the EU and the UK kicks off on Tuesday. The annual symposium at Jackson Hole will traditionally be kept in mind by financial market participants.