Key Points From This Week

UK Introduces Fresh Lockdown Measures

The UK PM announced a new three tier lockdown system this week range in levels of severity from 10pm closing time for hospitality and no groups of more than six people, through to tier two which means no mixing between households indoors and finally tier three which means all hospitality venues closed and no household mixing at all. London is currently placed in tier two though has been warned this could soon change if the infection rate doesn’t die down.

BOE Ask Lenders About Negative Rates

In the strongest sign yet that the BOE might soon adopt negative rates, deputy governor Sam Woods wrote to regional lenders asking them to detail how they would cope with negative rates. The BOE has consistently confirmed that it is discussing negative rates though has so far ruled out using them in the near term. In light of the new restrictions, however, this might well change in the near term.

Biden’s Lead Grows Over Trump

Biden’s lead over Trump continues to widen in the polls with the Democrat candidate now standing an average of ten points ahead of Trump. Trump’s ratings have been hurt over recent months as a result of his perceived failures in handling the COVID pandemic as well as his response to the racial equality protests in the US. Following a messy first presidential debate and Trump’s subsequent COVID diagnosis, Trump’s ratings have fallen further.

Key Events Next Week

Chinese GDP

Traders will be watching the latest Chinese GDP data due next week. Economic activity has been recovering steadily in China over recent months and traders will be keen to see if this momentum was maintained over the last quarter. A positive reading will eb a firm boost for risk appetite.

UK, Eurozone and US PMIs

The upcoming PMI data sets next week will be a big event for markets. The recovery in the factory and non-factory sector continues to develop across the three economies, however, momentum was much weaker last month. Traders will now be looking to see whether this was just a blip of whether momentum fell again over September. A weak print here could be a big blow to risk appetite, given the current concerns around fresh lockdowns.

Keep An Eye On

UK Lockdown Updates

With the UK government warning that the situation in the UK is very severe, the chance of lockdown statuses being updated over the next week is high. The Mayor of London has warned that unless the spread of the infection slows, London could soon find itself being upgraded to the highest level which would be a massive blow to national GDP.

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