Good morning
EU suggest they may offer a tweak to the Brexit deal over Northern Ireland, to allow more goods, such as medicine and agricultural products, to enter unchecked. Sounds like good news although the UK are still insisting European Courts of Justice will have no rule over Northern Ireland. The EU are unlikely to agree to this so expect some unpleasant headlines.
Meanwhile IMF have warned of a possible new financial crisis that could be triggered by lower growth and tighter financial conditions. They also warn UK that inflation risks are certainly to the upside. Feds Bostic has similar ideas for the US, saying high inflation could last well into 2022, which puts something of a question mark over the use of the term transitory. US inflation numbers due out today are expected to be in line with those last month, perhaps even a tad higher given the energy price rises, but it would take a real low shock to push the market away from taper thoughts. Yellen though still sticks with the transitory inflation thinking. FOMC minutes follow later today which could give us a little more information about tapering disucssions.
GBP pretty much unmoved by this mornings UK data which was generally on the weaker end of expectations although some production data was on the more positive side. BoEs Cunliffe speaks later today although not expected to touch on monetary policy. GBPUSD has dragged itself back above 1.3600 to reach 1.3620, while GBP has also recovered some losses against EUR with EURGBP back to 0.8480 (GBPEUR 1.1790).
German inflation was exactly in line with expectations and with the previous months readings. EURUSD now 1.1550 having been down to 1.1525 yesterday.
Russia say they are in favour of energy security in Europe and are using reserves to stabilise the natural gas market. Prices remain elevated, now around $5.55, although these are off $1 from last weeks highs.
Chinas trade surplus pushed higher to $66.76bn, helped by a surprise increase in exports and disappointing imports. IMF meanwhile have said China government has the ability to deal with any fallout from the Evergrande crisis and that Chinese banks do not seem over-exposed to Evergrande.
Finally, there are some reports that cargo ships are being turned away from UK ports, which are already bursting at the seams with containers that are not being collected due to the HGV driver shortage. There are suggestions this could well lead to shortages of toys, electronics and clothes at Christmas. I can tell you, the last thing we need in my house is any more of the aforementioned items, therefore I’m not too unhappy to hear this. Perhaps I’ll get the kids some lorry driving lessons instead.
- 10.00 EU industrial production
- 13.30 US CPI
- 15.30 BoEs Cunliffe speaks
- 19.00 FOMC minutes
- 21.30 Feds Brainard speaks
- 23.00 RBAs Debelle speaks
- 00.01 UK RICS house prices
- 01.00 Feds Bowman speaks
- 01.30 AUS employment
- 02.30 China CPI
- 05.30 Japan industrial production
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