Today's news headlines: 

‘U.K. Inflation Surges to Highest in a Decade on Energy Costs’. This morning’s Consumer Price Index print beat forecasts to rise 4.2% from a year ago in October, the fastest pace since November 2011. The consensus was for a 3.9% increase following a reading of 3.1% in September, but the upside surprise will heap pressure on the Bank of England to raise interest rates at their December meeting. The concern at the BoE is that inflationary pressures become deep-rooted rather than the transitory bout of inflation that had been widely mooted. (Bloomberg)

‘U.S. Retail Sales Jump by Most Since March, Topping Forecasts’. US households continued spending in October, undeterred for the third straight month despite prices rising at the fastest rate in decades. The value of retail purchases increased 1.7% last month, better than the 1.4% advance expected by economists—the S&P 500 advanced in response, while Treasuries were little changed. The data emphasized how, despite the pandemic, elevated savings and rising wages helped Americans to spend despite businesses passing on higher input costs. Although retail sales stand well above pre-pandemic levels, waning consumer sentiment threatens to temper future demand. (Bloomberg)

Today

Overnight, the Yen weakened to a four-year low following stronger than expected US data, which had helped bolster the greenback to one-year highs. Expectations for tighter monetary conditions boosted the yield on the 10 Year Treasury above 1.6%. Meanwhile, uncomfortably high rates of inflation threaten to remain for one to three years, according to UBS Group Chairman Axel Weber.

Events

UK Consumer Price Index y/y: 4.2% vs 3.1% previously
UK Retail Price Index y/y: 6.0% vs 4.9% previously
Canada CPI m/m: 1:30PM
Federal Open Market Committee member Williams speaks: 2:10PM
FOMC member Evans speaks: 9:05PM
FOMC member Bostic speaks: 9:10PM

Interbank rates:

GBP/USD – 1.3443
GBP/EUR – 1.1894
EUR/USD – 1.1303
USD/CAD – 1.2550

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