Today's news headlines: 

‘Fed officials expect three rate rises next year in hawkish pivot on inflation’. Runaway inflation has finally forced the hand of the Federal Reserve, with the central bank expecting to raise interest rates three times next year. The Fed will also begin reducing the size of its bond purchases by $30bn starting in January. The US economy is now displaying the necessary signals for the Fed to begin its taper, with inflation, growth, and the labour market all in favourable positions for this support to be removed. (Financial Times)  

‘UK companies warn about impact of Omicron staff shortages’. The new Coronavirus variant is already causing problems for companies throughout the UK as infections continue to rise. The UK Health Security Agency has suggested that as many as 200,000 infections occurred on Monday. This has sounded alarm bells for labour-intensive sectors, with many worried about further supply chain problems similar to those caused by the Delta outbreak in the summer. (Financial Times)

Today

Asian markets tracked higher overnight following the US market’s strong close as the Fed turned more hawkish; the S&P 500 closed 1.63% higher. The major pairs are where we left them at the end of trade yesterday as the markets look to the Bank of England today.

Events

Australia Unemployment Rate: 4.6% vs 5.2% last month
Germany flash Manufacturing and Services Purchasing Managers’ Index: 8:30AM
UK Monetary Policy Committee Asset Purchase Facility votes: 12:00PM
UK MPC Monetary Policy Summary: 12:00PM
Eurozone Main Refinancing Rate: 12:45PM
European Central Bank press conference: 1:30PM

Interbank rates:

GBP/USD – 1.3284
GBP/EUR – 1.1751
EUR/USD – 1.1304
USD/CAD – 1.2806

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