Sep 7, 2020

Chart of the Day: Brexit talks resume & dollar edges higher

European stock futures are pointing firmly higher after a mixed session in Asia, with the dollar edging higher and the crude oil continuing with its recent losses. German industrial production tops the agenda for economic data on a slow day for European earnings.

Face-to-face talks between U.K. and European negotiators will resume in London with both sides having bemoaned the lack of progress that has been made. Any signs that will change are thin on the ground. The U.K. is stepping up its preparations for the trade talks to fail and is planning new legislation that would override key parts of its withdrawal agreement, a move that could threaten the negotiations further. U.K. Foreign Secretary Dominic Raab said this week is the “moment of reckoning” for getting a deal done but warned over the impasse that still exists over state aid and fisheries, while U.K. negotiator David Frost sought to temper any high hopes that some headway will be made. All this as the rumblings in Westminster suggest growing discontent among Conservatives with Prime Minister Boris Johnson’s grip on the leadership.

U.S. virus cases remain steady but the infection numbers in the U.K. increased by the most in more than three months, while the rate in Germany also ticked higher. France is also seeing a spike in numbers, just as schools start to head back to class, and all of this comes ahead of a crucial few weeks for authorities trying to keep rates under control in which university students will start heading to campus. Across Europe, the increasing concern is a growing fatigue among citizens with the virus and the constraints it has placed on general life, a risk that a former head of the U.S. Food and Drug Administration has highlighted too. Elsewhere, India has overtaken Brazil as the country with the world’s second-highest number of virus cases.

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