Boris looked progressively more hot and bothered as the day wore on yesterday. First he was getting knocked around by Sir Kier Starmer across the dispatch box and that was followed later in the day, taking to the podium, flanked by his experts in residence, to deliver a new three word strategy ‘Hands, Face, Space’ along side the ‘rule of six’ that we all now need to abide by. Having been taken to task over the current testing regime, Boris has announced ‘operation moonshot’, where millions of tests are carried out daily (using technology that doesn’t yet exist, at a cost that isn’t yet known and a timeline that isn’t yet calculable) to try and get back to normal life. Sky has the ‘details’.
It probably wasn’t covid that was weighing most heavily on his mind though, as the escalation of his plans to break the laws that govern the transition agreement has now made it across the Pond. The US have said that there will be no trade deal with the UK if we do anything that puts the Northern Ireland peace process in jeopardy. The UK government are going to explain their position in detail to the Europeans today, but Europe is already setting the wheels in motion with possible legal action ahead of the bill being passed in parliament. We don’t yet know when the bill will go to a vote in the Commons, but even with the dissent amongst his own party, Boris has probably got the numbers to get it through, as such it is likely that only external pressures will force a rethink.
However, all is not lost. Ireland are saying that a deal can still be done, despite all the unnecessary distraction. Their foreign minister, Simon Coveney, has said that he thinks Boris does want to get a deal and that he hopes people can swiftly move on from this chaos.
In America, Trump is coming under fire ahead of yet another damning book release. Bob Woodward’s book “rage” uses Trump’s own words from interviews with the author, where he said back in February that Covid could be “more deadly than even your strenuous flu”. At the same time Trump was telling the media that the virus would just go away by itself. Trump has defended his position by saying he has to be a cheerleader for America and doesn’t want to cause panic in the country, or the world. CNN has a good rundown of what could be another re-election denting story and the book doesn’t just contain this revelation, it has pretty damning accounts of his presidency by people that have served within it.
Joe Biden could have put a cat amongst the pigeons yesterday as he gave a broad outline of a tax plan that would encourage businesses to reshore their operations with tax incentive and place an additional tax on profits made on overseas sales. The plan was pitched in Michigan, a state that would warmly welcome reshoring of industry, but would have been dimly viewed by tech businesses on the west coast. The market reaction to the news was muted though, which speaks to the uncertainty that Biden will get in, despite the calculations of the recent polls that suggest he is the favourite. It also points to markets viewing the likelihood that he will get in and at the same time control of the Senate will flip to the Democrats, which would give Biden the majorities needed to enact change, as even less probable
Today’s big event is the ECB press conference, where we had previously thought wed get a pretty dovish outlook from Ms. Lagarde and therefore some possible downside to the single currency. This view has been tempered somewhat by some reasonably upbeat assessments from other ECB members about how the recovery is going. As such we’d flip a coin as to how this will go. Other news of note will be the US Department of Energy oil inventories. Oil oversupply is a real fear in the market at the moment and these numbers could well compound that issue.
Have a great day.