Daily Market Update 03/11/2021


Main Headlines:

At this week’s Federal Open Market Committee Meeting, the Federal Reserve will announce a scaling back of its enormous pandemic-related stimulus programme amid uncertainty caused by persistent inflationary pressures and whether the US central bank will need to raise interest rates sooner than expected. Members of the Federal Open Market Committee and other Fed officials have for months engaged in an extensive debate over choosing the ideal moment to start tapering the $120bn monthly asset purchase programme. The scheme was put in place last year to address difficult trading conditions in the $22tn US government bond market and to support the economy during the economic turbulence of Covid-19.

A coalition led by Mark Carney, the former governor of the Bank of England, has signed up to tackle climate change by committing $130tn of private capital to attempt to hit net zero emissions targets by 2050. The Glasgow Financial Alliance for Net Zero (Gfanz) — which is made up of more than 450 banks, insurers, and asset managers across 45 countries — said it could deliver as much as $100tn of financing to help economies transition to net zero over the next three decades. The total capital figures put forward by the Gfanz drew scepticism, however, from some climate campaigners that track the financial services industry.

Markets

GBP

Sterling is strong against most majors in overnight trade. Most big UK firms and financial institutions will be forced to show how they intend to hit climate change targets, under proposed Treasury rules. By 2023, they will have to set out detailed public plans for how they will move to a low-carbon future – in line with the UK’s 2050 net-zero target. Plans will be submitted to an expert panel to ensure they are not just spin. “Broken” military procurement practices at the UK Ministry of Defence have repeatedly resulted in billions of pounds of taxpayer money being wasted, according to the House of Commons Public Accounts Committee.

EUR

The euro is higher against the dollar and lower against sterling. A press leak of a text message sent by French President Emmanuel Macron to Australian Prime Minister Scott Morrison is an “unprecedented new low” in the relationship between the two countries, according to France’s ambassador in Canberra, Jean-Pierre Thébault. Having tasted defeat in the Bundestag elections, Germany’s CDU has decided to part with Armin Laschet as party leader, who had followed in the wake of Angela Merkel’s 16 years in power. For the first time, the CDU leader will be chosen via a vote of all party members. Possible candidates include Friedrich Merz a former senior CDU MP, as well as Health Minister Jens Spahn and foreign policy specialist Norbert Röttgen.

USD

The dollar is lower against most majors in early morning trade. Republican Glenn Youngkin was elected governor of Virginia on Tuesday, halting a long trend of Democratic electoral gains in the state and giving the GOP a potential playbook in competitive parts of the U.S. ahead of next year’s congressional midterm elections. The Centers for Disease Control and Prevention recommended use of the Pfizer-BioNTech Covid-19 vaccine among children ages 5 to 11 years, opening the door for immunizations to start. The endorsement, by CDC Director Rochelle Walensky on Tuesday, was the last step before doctors, nurses and pharmacists could start giving the shots.

Ballinger & Co. Morning Report–03rd November 2021

Today’s Rates

GBP>EUR – 1.1751

GBP>USD – 1.3628

EUR>USD – 1.1591

GBP>CAD – 1.6913

GBP>AUD – 1.8306

GBP>SEK – 11.659

GBP>AED – 5.0048

GBP>HKD – 10.599

GBP>ZAR – 20.908

GBP>CHF – 1.2415



Today’s Calendar           

·       EUR    ECB’s President Lagarde speech

·       USD    ADP Employment Change(Oct)

·       USD    ISM Services PMI(Oct)

·       USD    Fed Interest Rate Decision

·       USD    Fed’s Monetary Policy Statement

·       USD    FOMC Press Conference

Today’s Highlights

·       Forex Today: Dollar firms, all eyes on Fed’s policy announcements

·       EUR/USD Forecast: Euro’s failure to hold above 1.1600 a warning sign before Fed?

·       GBP/USD advances above 1.3600 on Brexit, BOE chatters, Fed eyed

·       EUR/GBP: Downside pressure to fade on a break above the 55-DMA at 0.8529 – Commerzbank

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