Yesterday, Senator Joe Manchin has said he will vote against the Democrat’s $2 trillion ‘Build Back Better’ Act, in a move which throws the bill into jeopardy. In an interview with Fox News, Manchin cited many concerns as the reasoning behind his decision, namely the bill’s effect on debt and inflation, as well as the Democrat’s desire to fund several programs on a temporary basis. The bill seeks to raise taxes on corporations and very high-income individuals to offer lower prescription-drug costs and subsidize childcare costs among other things. The White House press secretary stated that Manchin’s comments were not in line with those he had talked about with Biden and that Manchin had outlined proposals for a deal which cost $1.75 trillion.
Following David Frost’s resignation from Brexit minister on Saturday evening, it was announced yesterday that foreign secretary Liz Truss, has been awarded the role of overseeing the UK’s trade talks with the EU. The former Brexit minister stated issues with the government’s ‘direction of travel’ as the reasoning behind his resignation, citing Coronavirus measures and tax prices. Downing Street has stated that the Foreign, Commonwealth and Development Secretary will be taking over all Frost’s posts immediately, including deciding how to approach the Northern Ireland protocol. It is believed that the prime minister is no longer wanting to remove the ECJ from its role in administering the Northern Ireland protocol, while Frost was a harsh critic of the ECJ.
Sterling is weaker than most major currencies in early morning trade. Today, a report published by the Nuffield Trust, outlined that the UK government has failed to resolve key post Brexit health issues. The report suggested that ministers were negotiating ‘brinkmanship’ and had been delaying decisions. It lamented that in the year following Britain’s exit from the bloc, issues such as staffing pressures caused by immigration restraints had not been adequately addressed. Meanwhile, as the Omicron variant continues to rapidly spread across the UK, the health secretary failed to rule out that additional Covid-19 measures could be introduced in England before Christmas. In an interview with Andrew Marr, Javid said there were ‘no guarantees’ while dealing with a pandemic.
The euro is well big against most major currencies overnight. Maros Sefcovic has called for a reset in the EU-UK relations in order to tackle key issues. The EU’s Brexit negotiator stated that by resolving the dispute over Northern Ireland, they could ‘re-establish political trust.’ He followed this by highlighting this would allow them to tackle issues in climate change and European security. Elsewhere, Europe continues to amp up its Covid measures. The Netherlands has become the first EU country to re-enter a nationwide lockdown as new restrictions began yesterday morning and are set to continue until at least mid-January. Meanwhile, Germany has announced it will ban al travellers entering from the UK from midnight on Sunday, excluding nationals and residents, to prevent the spread of Omicron.
The dollar is weaker against the euro but higher than sterling in early morning trade. Following Manchin’s decision not to support the Build Back Better bill, Biden’s climate plans have been put into question. The legislation was seen as crucial to the US achieving their emissions targets of cutting emissions by 52% below 2005 levels. While independent analysts are highlighting Biden could still meet the target, doing so would require more ambitious actions. Elsewhere, the Chief Medical Advisor said Omicron could place a strain on hospitals over the next few weeks. However, he also stated that wider lockdown measures looked unlikely in an address on ABC news.
Ballinger & Co. Morning Report- 20th December 2021
GBP>EUR – 1.1709
GBP>USD – 1.3188
EUR>USD – 1.1261
GBP>CAD – 1.7031
GBP>AUD – 1.8564
GBP>SEK – 12.022
GBP>AED – 4.8431
GBP>HKD – 10.283
GBP>ZAR – 20.880
GBP>CHF – 1.2185
· 10:00 a.m.: ECB Oct. current account
· 10:00 a.m.: Poland Nov. PPI
· 10:30 a.m.: Current account Oct. balance: Slovakia, Italy, Greece, Portugal
· 11:00 a.m.: Finnish government economic forecasts
· 12:00 p.m.: U.K. Dec. CBI trends
· 2:30 p.m.: Ukraine 3Q GDP
· Bloomberg Dec. economic survey: Georgia, Armenia, Belarus, Moldova
· January WTI crude futures expire
· EU Environment Council meets in Brussels
· German Chancellor Olaf Scholz visits Rome
· Forex Today: Safe-haven flows dominate markets at the start of the week
· EUR/USD Forecast: Bears hold the reins amid escalating Omicron fears
· ECB governors sought greater acknowledgement of inflation risks – Reuters
· UK’s Raab: Can’t make guarantees on further restrictions
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