Daily Market Update 22/09/2021

Markets

GBP

Sterling is weaker than most majors in the early morning trade. US President Biden warned Boris Johnson on a meeting yesterday that he doesn’t want to see a trade deal with the UK lead to a “closed border” in Ireland. When asked about Brexit, during the meeting with Johnson, Biden said that the trade deal with the UK is still “being discussed” However, Biden added that he “feels very strongly” about the Northern Ireland protocol. When asked by a reporter if the delay to the deal with the UK was due to his Irish heritage, Biden said that he wouldn’t like to see “a change in the Irish accords”. The EU has said on multiple occasions that the protocol can’t be negotiated again.

EUR

The euro is level with the dollar and higher than the pound this morning. Germany’s Social Democrats (SPD) saw their lead over Chancellor Angela Merkel’s conservatives narrow in a poll published on Tuesday, pointing to a tightening race just five days before a federal election. The centre-left SPD, whose candidate for chancellor Olaf Scholz is currently vice chancellor and finance minister in Merkel’s grand coalition, remained stable at 25%, according to the Forsa poll for RTL/n-tv television. Support for the conservative CDU/CSU alliance, whose chancellor candidate is Armin Laschet, edged up one percentage point to 22%. Merkel, in power since 2005, plans to stand down after the election. The SPD’s Scholz is German voters’ most popular choice by far to succeed her as chancellor.

USD

The dollar is level with the euro and stronger than the pound overnight. A CNBC Survey on the tapering of the Federal Reserve found that 32 market participants shows they expect the Federal Reserve to announce a reduction in its $120 billion in monthly asset purchases in November and begin to taper in December. The Fed is expected to cut purchases each month by $15 billion. “The challenge for officials will be continuing to delink the timing of tapering from eventual rate liftoff amid splintering views within the FOMC,” said Kathy Bostjancic, chief U.S. financial market economist at Oxford Economics. Amid such concerns, the market still forecasts no rate hikes until the end of 2022. In fact, expectations for rate increases have actually eased since the more optimistic days in the spring when the reopening gathered steam.

Ballinger & Co. Morning Report–22nd September 2021



Today’s Rates

GBP>EUR – 1.1633

GBP>USD – 1.3639

EUR>USD – 1.1725

GBP>CAD – 1.7464

GBP>AUD – 1.8833

GBP>SEK – 11.845

GBP>AED – 5.0092

GBP>HKD – 10.618

GBP>ZAR – 20.112

GBP>CHF – 1.2597

 

  Today’s Calendar           

·       USD      FOMC Economic Projections

·       USD      Fed Interest Rate Decision

·       USD      Fed’s Monetary Policy Statement

·       USD      FOMC Press Conference

Today’s Highlights

·       Forex Today: Dollar retreats on some calm from Evergrande ahead of critical Fed decision

·       EUR/USD Forecast: Fed set to fuel relief rally after Evergrande can kicked down the road

·       Fed to wait until November for taper announcement – CNBC survey

·       S&P 500 Index: Close below 200-DMA at 4110 to mark an important change of trend – Credit Suisse

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