Daily Market Update 29/09/2021


Main Headlines
Treasury Secretary Janet Yellen warned lawmakers that the federal government will likely run out of cash and extraordinary measures by October 18 unless Congress raises the debt ceiling. The new estimate from Yellen raises the risk that the United States could default on its debt in a matter of weeks if Washington fails to act. A default would likely be catastrophic, tanking markets and the economy, and delaying payments to millions of Americans. Previously, the Treasury Department estimated it would run out of cash and accounting manoeuvres at some point in October. The warning comes hours after Senate Republicans blocked a bill that would have suspended the debt limit.
The fuel situation in the UK is starting to improve, PM Boris Johnson has said – as he urged motorists to fill up their cars in the “normal way”. He said the situation at fuel stations was “stabilising” and people should be “confident” to go about their business, after days of queues and pump closures. Labour said the government had let the country “crash from crisis to crisis”. Defence Secretary Ben Wallace has approved a request for 150 military tanker drivers to help deliver fuel. Training the drivers to use civilian fuel company tankers is expected to take place over the next three days, so the first deliveries could take place by the end of the week. With some drivers continuing to face difficulties in refuelling, there have been calls for key workers, such as health and social care staff, to receive priority at the pumps.

Sterling is well bid against most majors overnight. The UK government is to relax the regulation of gene-edited crops to enable commercial growing in England. The plants are to be tested and assessed in the same way as conventional new varieties. The changes are possible because the UK no longer must follow European Union regulations, which are the strictest in the world. The Scottish, Welsh and Northern Irish governments will get to decide whether to adopt or opt out of the changes. Environment Secretary George Eustice said that he would be working closely with farming and environmental groups to help grow plants that are stronger and more resilient to climate change.

The euro is higher than the dollar and lower than the pound in the early morning trade. Europeans are leaving home for shopping, eating out, traveling, and visiting cinemas, just as they did before the pandemic. This is a sign of a recovery in consumer confidence, suggesting that the eurozone economic recovery has not been compromised so far. September data show European consumers’ high vaccination rate suggests that people are starting to feel adventurous again. Part of the rebound was due to school reopening and workers returning to the office. This is reflected in the use of Eurozone airports and domestic public transport, reaching its highest level in September since the pandemic broke out in early 2020, according to Google Mobility Data and the Apple Mobility Report.

The dollar is lower than most majors this morning. Senator Elizabeth Warren said she opposes a second term for Federal Reserve Chair Jerome Powell, calling him a “dangerous man” because of the financial regulations that have been loosened during his tenure. Warren’s statement yesterday makes her one of only a few Democratic lawmakers to publicly call for the replacement of Powell — a Republican and a Trump appointee — when his term ends early next year. Last month, a group of House progressives including Rep. Alexandria Ocasio-Cortez said they want to see someone at the helm of the central bank who is more aggressive on financial regulation and climate change.

Ballinger & Co. Morning Report– 29th September 2021

Today’s Rates
GBP>EUR – 1.1578
GBP>USD – 1.3512
GBP>CHF – 1.2543
EUR>USD – 1.1667
GBP>CAD – 1.7145
GBP>AUD – 1.8641
GBP>SEK – 11.806
GBP>AED – 4.9653
GBP>HKD – 10.514
GBP>ZAR – 20.340

Today’s Calendar
• EUR- Consumer & Industrial Confidence (Sep)

Today’s Highlights
• EUR>GBP Analysis: Climbs to over two-month tops, evening a move beyond 200-day SMA
• EUR>USD: To suffer a deeper dive amid fears about debt ceiling and multiple energy issues
• GBP>USD: To plummet towards key support at 1.33 – SocGen
• GBP>USD: Stages a quick comeback towards 1.3550 amid positive equities

This document has been prepared solely for information and is not intended as an Inducement concerning the purchase or sale of any financial instrument. By its nature market analysis represents the personal view of the author and no warranty can be, or is, offered as to the accuracy of any such analysis, or that predictions provided in any such analysis will prove to be correct. Should you rely on any analysis, information or report provided as part of the Service it does so entirely at its own risk, and Frank eXchange Limited/Manor House Foreign eXchange Limited accepts no responsibility or liability for any loss or damage you may suffer as a result. Information and opinions have been obtained from sources believed to be reliable, but no representation is made as to their accuracy. No copy of this document can be taken without prior written permission.


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