With latest reports showing global cases rising above the 30 million mark, prompting the WHO to warn that renewed increases in Europe are a “wake-up call”, the prospect of further lockdown measures being implemented remains a real threat.
The same is true for the UK, which along with ongoing Brexit uncertainty, represents key risks for the domestic economy.
On the latter, ahead of next week’s formal round of talks, informal discussions between the UK and the EU’s negotiators are set to continue in the coming week.
While divisions between both sides remain, the talks have become more fractious following the UK government’s attempt to ensure seamless trade continues across the UK’s internal market after leaving the EU.
If passed, the Internal Market Bill would override parts of the Northern Ireland protocol and Withdrawal Agreement.
The bill is currently at the committee stage, with MPs today set to debate those areas of it that deal with provisions relating to Northern Ireland, including the government’s compromise amendment that was tabled last week. However, it will not be until tomorrow that a vote takes place on it.
There is little else on today’s calendar that is likely to attract much interest. A number of central bankers are due to speak, including ECB members Lagarde and Holtzman and US Federal Reserve’s Brainard.
Recent policy meetings have highlighted both central banks remain alert to any signs of faltering recoveries and a preparedness to provide further stimulus. Given the ongoing challenges facing both the Eurozone and US economies, the overall guidance on policy is likely to remain unchanged. Data wise, in the US, the Chicago Fed index for August is expected to be broadly unchanged from its July level.
The US dollar continues to trade close to year-to-date lows, keeping EUR/USD close to the 1.20 mark. In recent weeks, a number of ECB officials have expressed concern over the strength of the euro currency, and any further worries expressed by today’s speakers will likely attract further attention.