Main Headlines:
Senator Elizabeth Warren called on the Securities and Exchange Commission to examine whether top Federal Reserve officials violated insider trading rules, as the Fed announced its inspector-general has opened an investigation. Warren called for a full investigation of trading activity by high-level Fed officials. She pointed to new revelations that Vice Chair Richard Clarida moved between $1 million and $5 million out of a bond fund into stock funds in February 2020, just a day before Fed Chair Jerome Powell put out a statement signaling that the central bank might take action to cushion the economy at the onset of the pandemic. The uproar comes at an inopportune time for Powell politically, as he awaits a decision on whether President Joe Biden will reappoint him for another term. Warren last week said she would oppose his renomination.
Today, PM Boris Johnson will escalate a row with business when he tells the Conservative party conference that some bosses have used high immigration as “an excuse” not to invest in their company or staff. The UK PM will insist his government has “the guts” to oversee a major transition to a “high-wage, high-skill, high-productivity economy” as he ends his conference locked in a war of words with business and farmers — once seen as a bedrock of Tory support. He has become infuriated with suggestions that the government is to blame for recent fuel shortages and supply chain disruption and has tried to mould the crisis into a new economic message. Some senior Tories say that recent state intervention in the economy, including the furlough scheme, had wrongly created a sense that ministers were responsible for fixing every business problem.
Markets
GBP
The sterling is stronger than the euro but weaker than the dollar this morning. British households are being quoted fixed-price electricity and gas contracts of more than £2,000 a year, the first time they have reached that level in at least a decade as wholesale gas prices continue to soar. Companies including Eon, Ovo Energy, Outfox the Market and So Energy have been offering one- or two-year fixed dual electricity and gas deals that are more than £700 above the main price cap, which is regulated by Ofgem to protect 11m households and rose to £1,277 at the start of October. Energy suppliers said the deals, based on average usage, more accurately reflect the current cost of providing households with electricity and gas.
EUR
The euro is lower than most majors in the early morning trade. EU member states have reduced tensions with the UK over Gibraltar by dropping a Brussels proposal for Spanish authorities to police entry into the UK territory. Yesterday, at a meeting of EU ambassadors, member states agreed instead to propose that officials from Frontex, the pan-EU border force, are stationed at Gibraltar’s port and airport alongside local officials. The move puts the EU’s negotiating position for the bloc’s talks with London over the future of the territory in line with a British-Spanish deal reached on New Year’s Eve last year. The final agreement has to be codified in a UK-EU treaty.
USD
The dollar is stronger than most majors overnight. US politicians pounded Facebook yesterday, accusing CEO Mark Zuckerberg of pushing for higher profits while being cavalier about user safety. During a Senate Commerce subcommittee hearing, whistleblower Frances Haugen called for transparency about how Facebook entices users to keep scrolling, creating ample opportunity for advertisers to reach them. The senators demanded regulators investigate whistleblower accusations that the social media company harms children’s mental health and stokes divisions. Zuckerberg, hours later in a public Facebook post, defended the company, saying the accusations were at odds with Facebook’s goals.
Ballinger & Co. Morning Report–06th October 2021
Today’s Rates
GBP>EUR – 1.1742
GBP>USD – 1.3571
EUR>USD – 1.1551
GBP>CAD – 1.7144
GBP>AUD – 1.8757
GBP>SEK – 11.940
GBP>AED – 4.9824
GBP>HKD – 10.558
GBP>ZAR – 20.544
GBP>CHF – 1.2610
Today’s Calendar
· EUR Retail Sales (YoY)(Aug)
· USD ADP Employment Change(Sep)
Today’s Highlights
· Forex Today: Energy crisis, higher yields lift dollar, ADP jobs, debt ceiling headlines eyed
· EUR/USD Forecast: Euro set to tumble to new yearly lows as King Dollar has all stars aligned
· EU Energy Commissioner Simson: Response to energy crisis may include aid, tax cuts.
· ECB’s Centeno: Inflation should ease if current atypical effects diminish
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