Johnson’s government teetering
Today's news headlines:
‘Truss replaces Frost in overseeing UK’s Brexit talks with EU’. Brexit Negotiator David Frost resigned at the weekend amid a flurry of speculation. While some suggest Boris Johnson is softening on stances in the Northern Ireland dispute, others suggest Frost simply wants to get out before the government falls. Foreign Secretary Liz Truss has been tasked to take over the thankless task at this important point in the negotiation. (Financial Times)
‘Joe Manchin says he will vote against Biden spending bill’. Joe Biden’s Build Back Better plan has had another setback after passing the House of Representatives. Democrat Senator for West Virginia Joe Manchin is determined to oppose the fundamental changes to social welfare, income inequality, and adherence to international commitments. He says he can’t justify the boost to inflation and debt created by the bill, even though it has been pointed out that large portions of the spending are offset by taxation. (Financial Times)
The market opens with the trade-weighted US Dollar moving towards recent highs, Crude slipping towards $70 per barrel, and US 10 Year Yields falling back to below 1.40%. Joe Manchin’s rejection of the BBB deal appears to be marking down US growth and inflation forecasts. Meanwhile, Johnson’s government is looking increasingly embattled, but only time will tell whether it can carry on. Another Covid lockdown seems likely to a point of no return for Johnson irrespective of the science. With virtually no data today and little the rest of the week, it spells a quiet few days leading into Christmas.
UK Confederation of British Industry Industrial Order Expectations: 11:00AM
US Conference Board Leading Index m/m: 3:00PM
Australia Mid-Year Economic and Fiscal Outlook: 11:30PM
GBP/USD – 1.3210
GBP/EUR – 1.1725
EUR/USD – 1.1255
USD/CAD – 1.2925
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