Today's news headlines:

'Sunak, Hunt say "inevitable" all Britons will pay more tax'. With the UK economy teetering on the brink of recession and inflation sitting at a 40-year high, the government is also facing the mammoth task of bringing down the deficit with borrowing costs rising. The Prime Minister and Chancellor cannot rely on spending cuts and will need to increase the tax burden on everybody, although 'those with the broadest shoulders should be asked to bear the greatest burden' according to the Treasury. The government is also under pressure to maintain inflation-linked pension and welfare increases, meaning near-term tax rises are almost a certainty. (Bloomberg)

'Biden warns oil firms he'll seek tax on "windfall" profits'. With just a week to go before the US midterm elections and gasoline prices still elevated from the summer, President Biden has put forward his ambition to tax oil companies' profits. The populist policy is all but impossible to deliver unless congressional Democrats can make significant gains next week in the Senate. Under the status quo, any proposal would certainly be voted down by Republicans and centrist Democrats for the foreseeable future. Stubbornly high energy costs have contributed to elevated inflation levels, which is hurting the Democrats' prospects, with doubt growing that they can hold on to their majorities in both the House and Senate. (Bloomberg)

Today

Markets have remained quiet ahead of tomorrow's Federal Reserve meeting, with pricing showing a likely 75bps hike ahead of a potential pivot early next year. The Aussie Dollar was largely unchanged after the RBA raised rates by just 0.25%. Overnight, Asian shares mostly advanced while US and European equity futures moved higher. 

Events

China Caixin Manufacturing PMI: 49.2 vs 48.1 previously
AUD RBA Cash Rate: 2.85% vs 2.60% previously 
German Import Prices: -0.9% vs 4.3% previously
UK Final Manufacturing PMI: 9.30AM
US ISM Manufacturing PMI: 2.00PM
NZ Employment Change & Unemployment Rate: 9.45PM
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Interbank rates*:

GBP/USD: 1.1540
GBP/EUR: 1.1605
EUR/USD: 0.9940
USD/CAD: 1.3545

 

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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.