Today's news headlines:
‘Inside the secret talks that broke Brexit deadlock on Northern Ireland’. This FT article is a really great read about the journey to a successful negotiation over the North Ireland protocol, which impresses that Rishi Sunak is a skilful tactician. What confuses us is that he hasn’t employed that same subtlety and feeling in his approach towards the UK public sector. (Financial Times)
‘Wall Street titans confront ESG backlash as new financial risk’. Environmental, social and governance (ESG)-based investing is a reasonable idea on its face--investing decisions should include some consideration of a company’s behaviour, towards the environment, say, in order to apply positive reinforcement. The problem is that this tag, which virtually any firm can acquire, has become a rubber stamp for ethical behaviour or, even worse, a disguise for any stripe of political agenda. Now the backlash has arrived, and firms that dove headfirst into the trend – KKR, Blackrock, etc. - are under fire from US politicians. (Financial Times)
The Dollar Index has been trading sideways for the past few days, but US Yields continue to climb. The two-year treasury yield has now surpassed the Nov 22 spike, heading towards 4.85%. Overnight, we received a real surprise in Chinese Purchasing Manager Index data which showed a surge towards improved conditions and expansion. We’re watching to see what Governor Bailey says about the cost of living crisis at 10 AM.
AU CPI y/y: 7.4% vs 8.4% last month
AU GDP q/q: 0.5% vs 0.7% last quarter
CN Manufacturing PMI: 52.6 vs 50.1 last month
CN Non-Manufacturing PMI: 56.3 vs 54.4 last month
CN Caixin Manufacturing PMI: 51.6 vs 49.2 last month
UK Nationwide HPI m/m: -0.5% vs -0.6% last month
EU German Buba President Nagel speaks: 10:00 AM
UK BOE Gov Bailey speaks: 10:00 AM
US ISM Manufacturing PMI: 3:00 PM
GBP/USD – 1.2070
GBP/EUR – 1.1350
EUR/USD – 1.0635
USD/CAD – 1.3610
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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.