Coiled spring

Today's news headlines: 

‘Fed poised to begin tapering as early as next month’. Markets are pricing-in the start of Federal Reserve tapering as soon as next month following the release of Federal Open Market Committee meeting minutes yesterday. The rapid economic recovery paired with spiralling inflation is somewhat forcing the Fed’s hand. The central bank is preparing to wrap up its bond-buying programme by mid-2022, with markets expecting one rate hike next year. Although US employment data has been less than encouraging, Atlanta Fed President Raphael Bostic has emphasised that the bank should remain firm on its current policy course. (Financial Times)

‘Evergrande crisis leaves Chinese developers shut out of global debt markets’. Since the world’s most indebted property developer, Evergrande, missed its Dollar-denominated bond payments last month, debt financing has all but halted. It’s thought around a third of all Chinese property developers could be frozen out of the international bond market as confidence took another knock more recently with the Fantasia default. Major banks are calling for more support from China to encourage lending and prevent deal flow from drying up in what is a tentative time for the industry. (Financial Times)


UK markets continued to tick higher yesterday on the back of positive industrial production data, with the FTSE 100 closing 0.16% higher and the FTSE 250 gaining 0.74%. Brent Crude has jumped 0.80% in early trading, threatening to break $84 a barrel. Cable has climbed to $1.3680 this morning, while EUR/USD has broken the $1.1600 handle.


Australia Unemployment Rate: 4.6% vs 4.5% last month
China Consumer Price Index y/y: 0.7% vs 0.8% last month
Monetary Policy Committee member Silvana Tenreyro speaks: 11:10AM
US Producer Price Index and Core PPI m/m: 1:30PM
US Unemployment Claims: 1:30PM
FOMC member Raphael Bostic speaks: 3:00PM
MPC member Catherine Mann speaks: 3:40PM
FOMC member Thomas Barkin speaks: 6:00PM

Interbank rates:

GBP/USD – 1.3686
GBP/EUR – 1.1796
EUR/USD – 1.1602
USD/CAD – 1.2397

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