Today's news headlines: 

‘Investors bet on Bank of England to be in vanguard of tighter monetary policy’. Markets have priced in the Bank of England raising interest rates to the highest level since 2009 by the end of next year, as inflation continues to spiral. A 15 basis-point rise is expected on Thursday, which will take the benchmark rate to 0.25%. Although concerns about runaway inflation are real, some members of the Monetary Policy Committee are urging a more cautious approach as the UK recovery appears to be running out of steam and consumer confidence continues to move lower amid the rising cost of living. Some are expecting the decision to raise rates to be delayed until February 2022, with more information needed surrounding the ending of furlough and the health of the labour market. (Financial Times)

‘US companies struggle with staff shortages despite rising wages’. The latest round of earnings calls last week highlighted the struggles many US companies are facing, with the hiring and retention of staff proving a challenge despite wage hikes across the board. Amazon is forecasting a rise of almost $2bn in its wage bill for the fourth quarter, with the company offering a $3,000 sign-on bonus for roles in its distribution centres in the run-up to Christmas. All eyes will be on Non-Farm Payrolls this Friday as the US only managed to add 194K jobs to the economy in September, far below expectations. (Financial Times)

Today

On Friday, European markets closed relatively flat as the first look at Eurozone inflation for October came in higher than expected at 4.10%. The S&P 500 closed 0.19% higher despite revenue misses for Apple and Amazon. The US Dollar Index has made a move to the upside this morning, trading at 94.20, putting early pressure on Cable and EUR/USD starting the week.

Events

China Caixin Manufacturing Purchasing Managers’ Index: 50.6 vs 50.0 last month
German Retail Sales m/m: -2.5% vs 1.2% last month
US Institute for Supply Management Manufacturing PMI: 2:00PM
US Construction Spending m/m: 2:00PM
Japan Monetary Policy meeting minutes: 11:50PM
France Bank Holiday: All day
Italian Bank Holiday: All day

Interbank rates:

GBP/USD – 1.3664
GBP/EUR – 1.1817
EUR/USD – 1.1562
USD/CAD – 1.2391

The markets are moving. To speak to our team, please call +44 (0)20 3465 8200.