Market movers today

Markets will keep an eye on US-China headlines, after tensions between the two countries heated up again yesterday with China sanctioning some US officials in retaliation for the Hong Kong dispute. Investors also still await clarity on the timeline of the US stimulus package.

Today’s data highlight will be the German ZEW survey for August. The ZEW has staged a quick rebound in recent months and the widening current situation expectations spread bodes well for a continued recovery in economic activity in August. That said, there might be limited scope for a further uptick in the expectations component, given signs of plateauing in high frequency data and the latest rise in COVID-19 cases.

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Also on the calendar are the UK jobs report for June, while San Francisco Fed President Daly will take part in a virtual discussion late in the evening.

Selected market news

Positive risk sentiment has set the tone in markets to start the week. Equity and commodity markets gained on Monday, a move that largely continued overnight. Yields climbed higher, with the 10Y US yield rising to the highest level since late July. Finally, the US has seen a small rebound, taking EUR/USD below 1.18 again.

US President Donald Trump said overnight that he is “very seriously” considering a capital gains tax cut to help job creation. Another executive order, this time on capital taxation, would likely face legal challenges as it is pushing the boundaries of the President’s executive powers.

China said yesterday that it will sanction 11 Americans in retaliation for US sanctions announced on Friday, targeting “those individuals who behaved badly on Hong Kong related issues”. The list includes Senators Macro Rubio and Ted Cruz.

Property prices in Denmark continue to climb according to the latest data from Boligsiden.dk. House prices rose 1% m/m (3M m.a.) in July, taking them to a new all-time high, while apartment prices increased 2.3% m/m (3M m.a.), back above pre-corona crisis levels.

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