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Take Five: Impasse!
Aug 14, 2020
1/WALL STREET WATCHES WASHINGTON
U.S. lawmakers negotiating a fresh dose of stimulus have reached an impasse.
Trillions of dollars injected by the Federal Reserve and huge government spending increases have stemmed coronavirus-linked economic damage, fuelling a rebound in a Citi index that tracks economic data relative to expectations.
But with almost 30 million Americans unemployed and coronavirus still spreading, Fed policymakers have been warning the recovery could sputter unless politicians come through with further measures. The S&P500 index is holding just off record highs. The wait is on to see if negotiations resume and bear fruit.
-White House, Democrats show no sign of budging on U.S. coronavirus aid-COVID-19 crushes U.S. economy in second quarter; rising virus cases loom over recovery
Graphic: Citi's U.S. economic surprise index here
2/LET’S BREXIT AGAIN
The twin troubles of Brexit and coronavirus ensured Britain’s second-quarter contraction of 20.4% was greater than any other major economy’s. And recovery will be elusive unless a free-trade deal is reached with the European Union before the post-Brexit transition period ends on Dec. 31.
EU-UK talks begin on Aug 17. The two sides remain far apart, but the meetings may show if they can lay aside their differences in time to reach a deal by the Oct. 2 deadline. An impasse may spell trouble for sterling and further pressure on domestic-focused shares.
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