Inflating the issue

Today's news headlines: 

‘UK inflation dips to 3.1% in September’. The UK has enjoyed some respite from rising inflation, with the headline Consumer Price Index falling 0.10% in September to 3.10% year over year. Prices were contained thanks to lower rises in the hospitality sector compared to last year when the ‘Eat Out to Help Out’ scheme ended. Inflation is expected to exceed 4.00% by the end of the year according to the Bank of England. Markets are also pricing in a 15 basis-point rate hike by the BoE as early as November, with the central bank hoping to keep a lid on inflation. (Financial Times)

‘UK supply chain crisis to last until at least 2023, business leaders warn’. Business leaders have sounded the alarm on the UK’s supply chain crises, warning that delays and shortages are expected to last into 2023. Fulfilment of orders, price increases, and component availability have all served to hamper supply chains, with these costs being passed onto the end consumer in the last six months and leading to portions of inflation becoming ‘baked in’. (Financial Times)


Today

US markets ticked higher yesterday as quarterly results continued to impress; the S&P 500 climbed 0.74%, while the Nasdaq made gains of 0.71%. Brent Crude has retreated to the $84 handle after hitting its highest level since 2018 on Monday. Cable is trading more actively around the $1.38 handle, with the possibility of a Bank of England rate hike next month lending support to Sterling.

Events

German Producer Price Index m/m: 2.3% vs 1.5% last month
UK Consumer Price Index y/y: 3.1% vs 3.2% last month
UK Retail Price Index y/y: 4.9% vs 4.8% last month
Canada CPI m/m: 1:30PM
US Crude Oil Inventories: 3:30PM
Federal Open Market Committee member Charles Evans speaks: 5:00PM
FOMC member Randal Quarles speaks: 6:00PM
Federal Reserve Beige Book: 7:00PM


Interbank rates:

GBP/USD – 1.3778
GBP/EUR – 1.1844
EUR/USD – 1.1632
USD/CAD – 1.2351

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