Main Headlines:
A US congressional committee probing the deadly Jan. 6 assault on the Capitol voted unanimously on Tuesday in favour of contempt-of-Congress charges against Steve Bannon. Bannon was a key aide to former president Donald Trump until he was fired in 2017. The committee says it is pursuing Bannon’s testimony because of his reported communications with Trump ahead of the January 6 siege this year, in which dozens of police officers were injured, and elected officials ran for their lives as Trump supporters fought their way in to the Capitol building in Washington DC. In the meantime, Donald Trump is attempting to block the committee’s work.
Rishi Sunak, Chancellor of the Exchequer, is preparing to slash a tax surcharge on bank profits by more than 60% in next week’s budget to keep the City of London competitive on a global scale after Brexit. The Chancellor will cut the surcharge from 8% to 3% from April 2023, to keep banking activity in the UK healthy in an era of higher corporation tax rates. The City of London claims the financial services sector, including staff and customers, contributes £75.6 billion a year in tax. Sunak also announced in his budget in March plans to raise corporation tax rates from 19 to 25% from 2023.
Markets
GBP
The pound is lower than most majors overnight. The UK’s lorry driver shortage is “not visibly getting better” and could last until 2023, MPs have heard. Industry leaders from the haulage, recruitment and food sectors warned at the BEIS committee today over the current scale and impact of drive shortages. The Road Haulage Association has previously warned of a shortage of around 100,000 drivers and said the issue has not improved despite efforts from government. Figures revealed by the Office for National Statistics earlier on Tuesday showed that driver numbers have plunged by 53,000 over the past four years, largely driven by retiring drivers not being replaced fast enough by new recruits.
EUR
The euro is stronger than most majors this morning. UBS President Axel Weber is expected to take center stage in a court battle today over the multi-million-euro bid by Spain’s Santander to UBS’s former top investment banker to become its CEO. Italian banker Andrea Orcelle has sued Spain’s biggest lender after it dropped a job offer nearly three years ago in dispute over its salary package. The matter revolves around whether the four-page offer letter to Orcell in September 2018 was a binding contract or a non-binding preliminary offer. Santander said the bank could not meet Orcel’s salary demands, which included covering 35 million euros ($41 million) of a 55 million euro compensation package expected to be received in future years from UBS.
USD
The dollar is higher than the pound but lower than the euro in the early morning trade. Global supply chains are under strain due to factors such as a resurgence of Covid-19 cases in Asia and labour shortages in the US, leading to a surge in raw material prices that is also squeezing profits at Unilever and Reckitt Benckiser. Procter & Gamble (P&G) said it will raise prices of some of its products to counter higher commodity and freight costs that are expected to take a bigger bite out of its earnings this year. Shares of the company, which reported lower quarterly earnings, while maintaining its full-year forecasts, were down 2.2% at $139.24. CFO Andre Schulten said that US retailers are aware of the new sticker prices.
Ballinger & Co. Morning Report–20th October 2021
Today’s Rates
GBP>EUR – 1.1851
GBP>USD – 1.3778
EUR>USD – 1.1623
GBP>CAD – 1.7012
GBP>AUD – 1.8397
GBP>SEK – 11.879
GBP>AED – 5.0599
GBP>HKD – 10.712
GBP>ZAR – 20.039
GBP>CHF – 1.2740
Today’s Calendar
· CAD BoC Consumer Price Index Core (YoY)(Sep)
Today’s Highlights
· Forex Today: Dollar selling takes a pause, eyes on inflation data, Fed’s Beige Book
· UK CPI misses estimates with 3.1% YoY in September
· ECB’s Villeroy: Inflation spike is expected to be temporary
· International Business Machines Corporation (IBM Stock) earnings for Q3 of 2021
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