Good Morning,

If at first you can’t agree, make it someone else’s problem. This is the approach government has taken to masks being worn in schools when children return next week. They’ve now said it’s up to the head teacher to decide the policy, except in the cases of areas where there is a local lockdown, where masks will be mandatory.

Cambridge university are joining the vaccine race, as they plan to start clinical trials of their vaccine in the autumn. The University has received government funding for this stage of the process and it seems they’re taking a different route to vaccination than others by sequencing all known coronaviruses and building something that would offer protection against future coronaviruses that may move from animals to humans. Reuters has more detail.

In Germany; a decision has been made to extend their covid relief efforts. Their version of furlough will be extended until the end of next year, whilst the loans and business support measures will now continue until at least the end of this year. Germany’s debt to GDP ratio was less than 60% in 2019 and even with the comparatively lavish spending they’re undertaking it’s likely that it won’t get above 80%. That number compares very favorably to just about any other country, who probably went into the crisis with more than 80% of debt to GDP and, much like the UK, will come out with numbers exceeding 100%. Germany also has the added advantage of paying the lowest coupon on its debt in the world and they think that servicing their debt will cost just €9bn a year.

Mike Pompeo has recorded his address to the Republican National Convention from Jerusalem. He’s said to focus on the president’s foreign policy achievements and as he’s there, it’s likely he’ll spend some time on the historic peace accord between Israel and the UAE. Interestingly Trump is also pushing ahead with plans to sell the UAE a bunch of F-35 fighter jets and armed drones, which is now more likely to happen because of said peace deal. The New York Times had a good piece recently on how this move would shift the military power dynamic in the region and reduce Israel’s air superiority. An arms sale of this scale can take years to go through though, so it’s likely that even if Trump manages to get a firm order and shout about it at a rally, it won’t be him that has the final say as to whether it goes ahead.

Staying with Trump: Three US states are suing his administration over the changes that have been made to the US Postal Service! You’d have thought his would have calmed down after a $25bn USPS funding package was agreed earlier in the week, but filings have been made by Hawaii, New Jersey and New York that allege “partisan meddling”. The BBC has the story

Also in the US: hurricane Laura looks set to cause billions of dollars of damage and disruption, having been upgraded to a category three storm. 84% of oil production has been cut in the gulf of Mexico ahead of the storm hitting the area and half a million people have been ordered to evacuate coastal areas of Texas and Louisiana .Fears are that the storm surge could reach 30 miles inland, when it makes landfall tonight and into Thursday.

Today’s data sheet is particularly quiet and if the market decides that hurricane watching is the order of the day, it’s likely we’ll see a risk off tone. Investors did manage to nudge markets higher yesterday, but enthusiasm was waning towards the close.

Be well


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