Risk sentiment still pretty solid as we start the day.
ASX reversed yesterday's fall and is up 1.8% today.
U.S Futures in the green.
European markets set to open higher again.
Not too much overnight data, but
Australia's GDP came in below estimates.
AUD dipped slightly on the release, but nothing drastic.
Treasurer Frydenberg already announced the extension of the jobkeeper scheme until March 2021, albeit a slightly slimmed down version.
JobKeeper wage subsidies evolve into a two-tiered system, with the $1500 flat fortnightly rate to end later this month.
People who worked less than 20 hours a week before the crisis struck will be paid $750 a fortnight from the end of September, while all others will receive $1200.
The maximum payment will come down to $1000 from December to March.
Tax cuts will be announced in the October budget.
WPAC on surprises in the release (via ForexLive):
- Hours worked fell by -9.8% in the quarter, following a -0.9% in Q1 ... materially weaker than the labour force survey, a -0.3% and a -8.4%.
- business investment was weaker than suggested by the partials
- Household incomes rose ... because of the wage subsidy scheme and other income transfers from the government
- Wage incomes fell by only -2.5%, while gross disposable income jumped by 2.2%, or up by a massive 2.9% in real terms.
- The household savings rate spiked to 19.8% from 6%, providing households with a considerable buffer to draw upon in coming quarters.
Pompeo: Expect further announcments on China in coming days/weeks
Pompeo was asked about a warning last month by the Chinese government’s top diplomat, Wang Yi, about the need to avoid a new Cold War, an apparent reference to escalating tensions between China and the United States.
Pompeo said “the Cold War analogy has some relevance,” but the challenges with China were different.
“This is different from the Cold War in that we are challenged by a country with 1.4 billion people,” he said.
“The challenges are different, they are economic challenges.”
Pompeo referred to actions the Trump administration has taken to restrict the activities of Chinese firms like Huawei Technologies Co and said further moves could be expected.
“And now you’ll see a broader effort, there’ll be announcements, I think, in the coming days and weeks we will see the United States confront this in a very serious way, all for the benefit of the American economy,” he said.
I'll keep mentioning the stimulus deal, purely because everyone else is.
“Sadly, this phone call made clear that Democrats and the White House continue to have serious differences understanding the gravity of the situation that America’s working families are facing.
Democrats have pushed for nearly $1 trillion in aid to municipalities hit by revenue shortfalls as a result of the coronavirus crisis, but Meadows told “Squawk on the Street” that figure was not “based on reality.”
Meadows said the GOP would support only $150 billion in new funding to state and local governments. That figure, on top of a previously allocated $150 billion, would rectify what he said was an approximately $275 billion loss in revenues sustained during the recession.
Expect this one to keep on running until the end of the month.
Japan's election will take place on September 14th at 06:00BST.
Suga is the favourite to replace Abe - and likely to continue with similar policies.
Euro Stoxx 50 announced changes to the index:
Looking ahead for this morning;
German retail sales and Spanish unemployment the main focus.
I will also be keeping an eye on the PPI figures.
There were mentions of higher price inputs in the manufacturing PMI's yesterday.
If price inputs are going up, but prices of goods aren't... nicht so gut!