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Brace for impact

Today's news headlines:

‘Inflation in UK Shops Climbs to Highest Rate on Record’. UK consumers are feeling the pinch as prices on everything from petrol to crisps have accelerated at the highest rate since 2005. The current level of food inflation, which hit 9.3% in August, could continue for at least another six months, according to NielsenIQ, which produces the data for the British Retail Consortium. More Britons are opting for discount supermarkets, buying less food, or choosing own-brand products to counter rising costs. The UK is set to enter a recession that could last more than a year, with energy costs set to rise even higher this autumn. (Bloomberg)

‘Europe Braces for Rationing Risks as Russia Showdown Intensifies’. Europe’s immediate energy future is in the hands of Russia, with a three-day halt of the Nord Stream Pipeline beginning today. This has fueled concerns that Moscow will find more reasons to slash natural gas output this winter, leaving mainland Europe at the will of the weather. Germany is at the epicentre of the crisis, having built up years of reliance on Russian energy to support homes and factories. Commerzbank has forecast a severe recession for the nation if Russia were to completely halt gas supplies. (Bloomberg)


Yesterday, Sterling fell against all G10 FX currencies, passing through the 1.17 interbank handle against both the Euro and US Dollar on weaker sentiment over the economic outlook. Overnight, equity futures in the US and Europe rose moderately, but we don’t expect any rally to be prolonged or far-reaching.


UK British Retail Consortium Shop Price Index y/y: 5.1% vs 4.4% previously
Eurozone Consumer Price Index flash estimate y/y: 10:00AM
Eurozone Core CPI Flash Estimate y/y: 10:00AM
US Federal Open Market Committee member Mester speaks: 1:00PM
US ADP Non-Farm Employment Change: 1:15PM
Canada Gross Domestic Product m/m: 1:30PM
Chicago PMI: 2:45PM

Interbank rates*:

GBP/USD – 1.1675
GBP/EUR – 1.1643
EUR/USD – 1.0027
GBP/CAD – 1.3075


Please contact your Dealer about any upcoming FX requirements you may have, or call +44 (0)20 3465 8200. 

*Indicative interbank rates taken on the day of writing. Please speak to your Dealer to find out the current rates available for you.