Daily Market Update 14/10/2021

Main Headlines:

The Federal Reserve could begin phasing out its pandemic-era stimulus programme as early as next month and wrap up the process by mid-2022, as more officials pencil in an interest rate rise next year. Minutes from the September meeting of the Federal Open Market Committee showed officials firming up their plans for the eventual end to the $120bn monthly asset purchase programme that has been in place since last year to bolster financial markets and the economy. Consensus is building for a reduction of those bond-buys “soon”, according to the minutes.

Another two energy suppliers with about 250,000 customers have collapsed in the latest escalation in the UK’s energy crisis. BP Plc-backed Pure Planet and Colorado Energy announced they have gone out of business on Wednesday, taking the total number of households that have been forced to switch supplier since the start of August to almost 2 million. Since the start of August, 12 utilities in the country have gone under. The unprecedented volatility in power and natural gas markets last week has added to pressure already on suppliers as surging prices push them to breaking point. Meanwhile, a Glencore-backed gas shipping company has told its customers it can no longer continue its services.

Markets

GBP

Sterling is stronger against most major currencies this morning. UK retailers and logistics companies have warned that the supply chain disruptions at Felixstowe are spreading to other container ports in the country and will exacerbate Christmas supply shortages. The Bank of England has banned its Monetary Policy Committee members from having private discussions with bankers after rumours that a deputy governor had revealed policy information in a recent meeting with an investment bank. Ministers are looking to relax rules shielding tens of millions of UK retirement savers from high charges as they step up efforts to funnel pension fund cash into the government’s “levelling up” agenda.

EUR

The euro is higher versus the dollar and weaker versus the pound overnight. Klaus Iohannis, a potential new prime of Romania, called on centrist-liberal leader of the USR party, Dacian Ciolos to form a government in a notoriously shifting political landscape. Covid infections and death rates in Romania have surged to their highest level since the onset of the pandemic and the vaccination rate hovers just above 30 per cent, one of the lowest in Europe. Slovak prosecutors said on Wednesday that the governor of the country’s central bank, Peter Kazimir, had been charged with a “corruption-related crime”.

USD

The dollar is lower against most majors in the early morning trade. The pace of US consumer price growth pushed higher in September, hovering at a 13-year high as inflationary pressures drove up the cost of food, energy and rent. The consumer price index rose 5.4 per cent in September from a year ago, slightly higher than the annual increase reported for August and the 5.3 per cent expected by analysts. Walmart, UPS and FedEx have pledged to extend their working hours in a bid to ease supply chain bottlenecks that are weighing down the US and global economic recoveries.

Ballinger & Co. Morning Report–14th October 2021

Today’s Rates

GBP>EUR – 1.1798

GBP>USD – 1.3706

EUR>USD – 1.1617

GBP>CAD – 1.6990

GBP>AUD – 1.8488

GBP>SEK – 11.833

GBP>AED – 5.0323

GBP>HKD – 10.660

GBP>ZAR – 20.184

GBP>CHF – 1.2608

Today’s Calendar 

·       CNY      FDI – Foreign Direct Investment (YTD) (YoY)(Sep)

·       USD      Producer Price Index ex Food & Energy (YoY)(Sep)

·       USD      Initial Jobless Claims(Oct 8)

·       USD      Initial Jobless Claims 4-week average(Oct 8)

·       USD      Fed’s Williams speech

·       USD      Monthly Budget Statement(Sep)

·       NZD      Business NZ PMI(Sep)   

Today’s Highlights

·       Forex Today: Dollar selloff pauses on recovering yields, eyes on mid-tier data

·       EUR/USD Forecast: How long can the recovery last?

·       South Korea: BoK expected to hike rates in November – UOB

·       ECB’s Enria: Even though the economic outlook has improved, caution remains of the essence

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