Today's news headlines:

‘UK recession looms after Truss’s growth program backfires’. Liz Truss came into power on promises of both tax cuts and growth, but just six weeks later, she presides over a country on the brink of recession. Yesterday, the new Chancellor, Jeremy Hunt, tore apart Truss’s growth plan, which had caused a sharp sell-off in UK assets, instead opting for tax increases and cuts to public spending. The UK could be paying the price for Truss’s radical experiment for some time, with markets levying increased borrowing costs on UK government debt which could cost £10bn a year by 2025. UK growth is expected to decline in the next few quarters, but a continued loss of market confidence could drive a severe downturn. (Bloomberg)

‘China’s unexpected GDP delay blamed by analysts on party meeting’. Third quarter GDP, along with a slew of economic indicators, were due out of China on Tuesday. The release, which is closely watched by investors, was unexpectedly delayed, with officials working overtime on the ruling party’s congress – due to hand President Xi a third term as party chief. Expectations are for growth to rebound from near-zero to 3.2%, which would still be a slow rate for China, reflecting the scale of the impact of coronavirus measures and the ongoing property slump. Meanwhile, Premier Li called on officials to better implement policies designed to keep the recovery going. (Bloomberg)

Today

Stocks in the US and Europe were higher yesterday, while index futures are also on the rise heading into today’s session, with markets reacting well to the UK’s attempts to restore stability. A closely watched gauge of Dollar strength declined for a second day running, although USD/JPY continued its ascent towards the 150 handle. 

Events

ZEW Economic Sentiment: 10AM
German ZEW Economic Sentiment: 10AM
US Industrial Production m/m: 2.15PM

Interbank rates*:

GBP/USD: 1.1345
GBP/EUR: 1.1516
EUR/USD: 0.9851
USD/CAD: 1.3690

 

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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.