Higher and higher

Today's news headlines:

‘UK inflation returns to double digits as food prices soar’. UK inflation jumped back to a 40-year high in September, underscored by surging food prices. The year-on-year reading of 10.1% was led by a 14.8% rise in food prices, in addition to furniture and household goods rising 10.7%. This maintains pressure on Bank of England officials to lift interest rates significantly next month, while the government has pledged to prioritise help for the most vulnerable. To compound fears of sticky inflation, producer prices, which measure the cost of goods leaving factories, rose 15.9% from a year ago. (Bloomberg)

‘Kashkari says Fed can’t pause at 4.5% if inflation still rising’. Officials at the Federal Reserve underscored their commitment to quelling inflation, as core inflation continues to surprise to the upside. Neel Kashkari hinted that the central bank would be hesitant to pause at 4.5% to 4.75%, with much of the upward price pressures coming from outside the labour market. This morning, the benchmark US 10-year treasury yield moved to its highest level since 2008, while the Dollar edged higher. (Bloomberg)


In addition to a stronger US Dollar this morning, US and European equity futures are both higher after a solid start to earnings season. Risk appetite remains on solid footing after prudent policy reversals from the UK government, but challenges remain due to the inflationary environment.


UK CPI y/y: 10.1% vs 9.9% previously
UK Core CPI y/y: 6.5% vs 6.3% previously
Eurozone Final CPI and Core CPI y/y: 10.00AM
Canada CPI: 1.30PM
BOE MPC Member Mann speaks: 4.00PM
Fed FOMC Member Bullard speaks: 11.30PM

Interbank rates*:

GBP/USD: 1.1298
GBP/EUR: 1.1486
EUR/USD: 0.9837
USD/CAD: 1.3758


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.