Today's news headlines:
'Jay Powell warns US rates will peak at higher level than expected'. The Federal Reserve continued its hawkish agenda yesterday, opting for a fourth consecutive 75 basis point hike in interest rates. Fed chairman Jay Powell hinted after the rate increase that the central bank still had a long way to go before making some sort of dent in the uncontrollable inflation consumers are experiencing. Switching to a different tone, Powell also mentioned that the Fed might not necessarily need to see several months of lower inflation figures to implement smaller increases over the course of the next few meetings. But instead, central bankers will take the cumulative tightening into account as well as the 'lags in which monetary policy affects economic activity and inflation'. (Financial Times)
'Russia agrees to rejoin Ukraine grain exports deal'. After exiting the pact, which oversaw the export of wheat from Ukraine to Middle Eastern and African countries, Russia has now agreed to rejoin the deal just five days later. Moscow initially abandoned the UN-backed grain deal on Saturday after blaming Kyiv for an attack on its naval fleet in the Black Sea. The agreement ending threatened to reignite a global food crisis affecting the world's poorest countries, including Somalia, Djibouti, and Sudan. Ukraine has pledged not to use the grain export routes for military purposes, but Moscow has adamantly retained its rights to exit again if these promises are broken. (Financial Times)
The UK central bank is flying blind today in the absence of Sunak and Hunt's Autumn Budget, which has been delayed to mid-November, but markets are expecting the Bank of England to follow in the Fed's footsteps and opt for a 0.75% hike interest rate rise. This would be its most significant increase since 1989, and would put its base rate at 3%, the highest since the Global Financial Crisis of 2008. European stocks are expected to open in the red this morning after another mammoth hike by the Federal Reserve coupled with weak Chinese economic data reignites global recession fears.
Switzerland CPI m/m (Oct): 0.1%
Eurozone Unemployment Rate: 10:00AM
BoE Official Bank Rate: 12:00PM
BoE Governor Andrew Bailey speaks: 12:30PM
US ISM Services PMI: 2:00PM
MPC Member Catherine Mann speaks: 8:30PM
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*Indicative interbank rates taken on the day of writing. Please speak to your Dealer to find out the current rates available for you.