Daily Market Update 22/12/2021

Main Headlines:

Yesterday, President Biden blamed the rapid spread of the Omicron variant in the US on a shortage of Covid-19 testing kits. Following this, he outlined how his administration would buy 500 million rapid test kits to send to households for free from January. While suggesting Americans ‘have to do better’ to fight the virus, he also dismissed claims his administration had been too slow distribute test kits more widely. His response follows the news earlier in the week that Omicron now accounts for 73 percent of Covid cases in the US. He also announced that they were set to deploy 1,000 military doctors and nurses to overburdened hospitals in January and February and that six emergency response teams were being sent to six key states.

As the rapid spread of the Omicron variant continues to impact the UK, Rishi Sunak announced a new package for companies affected by Omicron. The chancellor of the exchequer has unveiled a new £1bn fund yesterday. The fund will allow hospitality businesses to apply for grants of up to £6,000 per site and sets aside an extra £30m to help theatres and museums. However, the hospitality sector warned this was not enough to deal with the impacts of the rapidly spreading variant. UK Hospitality estimates that in total, hospitality businesses have lost £4bn in sales since the government began implementing Plan B measures last month. Furthermore, in several businesses in central London, sales are down to a fifth of what they were in two years ago.

Markets

GBP

Sterling is weaker against the dollar and higher than the euro in early morning trade. Following her first conversation with Maros Sefcovic, the British foreign secretary said yesterday she wats to ‘urgently resolve’ the Northern Ireland protocol dispute to enable both the UK and the EU to shift their focus to global challenges. Liz Truss stated she was determined to ‘unleash the potential’ of the relationship between the sides, which has been dominated by feuding in recent times. Meanwhile, yesterday Boris Johnson ruled out introducing further Covid restrictions in England before Christmas. While he stated he was ‘ready to take action’ if the situation changed, he did not believe there was enough evidence to justify further restrictions before Christmas.

EUR

The euro is weaker than most major currencies overnight. The Russian President warned he would consider a military response to the threat of Nato’s expansion towards Russia’s borders. In a speech yesterday, Putin told a group of senior military officers that Russia would ‘react harshly,’ in a move which signals he is not prepared to de-escalate the tension between the sides. Elsewhere, the energy crunch in Europe worsened, as European gas prices have surged to new record highs after flows from a key Russian pipeline stopped. Yesterday, gas for delivery in Europe jumped more than 20 percent to €181 per megawatt hour. This price jump threatens to drive household energy bills across the continent and increase inflationary pressures.

USD

The dollar is well big against most major currencies this morning. President Biden expressed optimism Tuesday that he could find a pathway to an agreement with Sen. Joe Manchin after the West Virginia Democrat rejected Democrats’ roughly $2 trillion education, healthcare and climate proposal. A jury on Tuesday found Harvard professor Charles Lieber guilty on six counts related to payments he received from a Chinese government talent program to share scientific developments and research secrets. Elsewhere, US regulators are insisting there should be greater disclosure from Chinese companies listed in the US. The guidance was released by the Securities and Exchange Commission and follows the new rules from Beijing which took billions of dollars from Chinese education companies and encouraged Didi, a ride-hailing group to delist from US exchanges.

Ballinger & Co. Morning Report- 22nd December 2021

Today’s Rates

GBP>EUR – 1.1767

GBP>USD – 1.3264

EUR>USD – 1.1271

GBP>CAD – 1.7118

GBP>AUD – 1.8552

GBP>SEK – 12.129

GBP>AED – 4.8707

GBP>HKD – 10.344

GBP>ZAR – 21.067

GBP>CHF – 1.2269

  Today’s Calendar           

·      8:00 a.m.: U.K. 3Q GDP, imports, exports

·      8:00 a.m.: U.K. government spending, private consumption, business investment

·      8:30 a.m.: Norges Bank 2022 borrowing plan

·      8:45 a.m.: France Nov. PPI

·      9:00 a.m.: Spain Nov. PPI

·      9:30 p.m.: Sweden Nov. PPI, retail sales

·      10:00 a.m.: ECB’s Holzmann speaks in Vienna

·      10:00 a.m.: Genscape Europe ARA crude inventory report

·      2:30 p.m.: Czech Republic repurchase rate

·      4:30 p.m.: EIA U.S. oil inventories

·      5:00 p.m.: Russia Nov. industrial production, PPI

·       EU to announce green investment rules for nuclear, gas projects

 

 Today’s Highlights

·       Forex Today: Dollar steadies after two-day decline, eyes on high-tier US data

·       EUR/USD Forecast: Bears to retain control as euro fails to clear key hurdle

·       GBP/USD extends sideways grind around 1.3250 after UK GDP data

·       USD/TRY has only one direction to go, up – TDS

  (https://frank-exchange.com/)

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