Chancellor splashes another £30b

UK Chancellor of the Exchequer Rishi Sunak pledged an additional GBP 30 billion to support employment, on top of the GBP 133 billion in coronavirus measures he has already unveiled. The money includes over GBP 5 billion in accelerated infrastructure spending, about GBP 9 billion for employers to retain workers through the end of January, funds for home insulation, and help for homebuyers and for hospitality firms.

BoE increases QE

The Bank of England increased quantitative easing by £100bn and kept base rates at 0.1%. That takes the total to £745 bn. The program was started with an initial £200 bn back in 2009.

UK government being paid to borrow money!

The government has sold a gilt with a negative yield for the first time. An auction by the Debt Management Office of a gilt maturing in July 2023 sold at an average yield of -0.003 per cent.
A negative yield means that the government is effectively being rewarded to borrow as investors agree to be repaid slightly less than they lent.

US oil price drops below $0

The consequence of an oil price war and the pandemic has resulted that in the first time in history the oil producers failed to find enough space in the US to store a glut of crude, forcing them to pay buyers to take it off their hands. West Texas Intermediate (WTI), the US benchmark, fell to -$37.63 a barrel, a loss of approximately 300 per cent.

PMIs at 7 year low

Increased Brexit uncertainty and escalating global trade tensions knocked British manufacturers in August. The purchasing managers’ index fell to 47.4 from 48 in July, its lowest reading since July 2012.

Chinese yuan

Today the Chinese yuan (CNY) finally broke through to the downside to the psychologically important level of 7.0 to the US dollar. 7.0 was a clear line in the sand defended by monetary authorities in Beijing since late 2016. While we are not currency experts, we would not be surprised to see the yuan weaken further now that 7.0 has finally been breached.

US Increases China Trade Tariff

President Trump has revealed plans to intensify his trade war with China by imposing tariffs on another $300 billion of its exports. Oil prices fell after the latest escalation in the dispute between the world’s two largest economies.