Problem at the ports

Today's news headlines: 

‘Maersk diverts big cargo ships from UK as Felixstowe fills up’. The HGV driver shortage is beginning to have a knock-on effect on the rest of the UK supply chain. Felixstowe is one of the hardest-hit shipping ports in the world, as cargo containers start to pile up with not enough drivers to manage the flow of supply. Congestion at shipping ports doesn’t look likely to abate, as the Christmas period approaches and the cost of containers remains persistently high. Costs between Europe and China have risen as much as six times over the course of the year. (Financial Times)

‘Evergrande bondholders say they have not received $148m interest payments’. Evergrande has failed to meet another bond payment today totalling $148m. Fears of greater defaults in the developer space sent Chinese corporate junk bonds soaring 22% to a ten-year high. Sinic Holdings, another Chinese developer, has issued liquidity warnings and emphasised that the probability of default has increased considerably. This comes just over a week after Fantasia defaulted on one of their US-Dollar denominated bonds totalling $206m. (Financial Times)


Today

European markets were relatively mixed yesterday as the FTSE 100 climbed 0.72% and Brent Crude hit $83 a barrel, pushing UK energy stocks higher. Elsewhere, the Euro Stoxx 600 edged out gains of just 0.05%. The US Dollar Index ticked 0.27% higher as default fears from China allowed risk aversion to creep back into markets.

Events

UK British Retail Consortium Retail Sales Monitor y/y: -0.6% vs 1.5% last month
Japan Producer Price Index y/y: 6.3% vs 5.8% last month
German Wholesale Price Index m/m: 0.8% vs 0.5% last month
UK Unemployment Rate: 4.5% vs 4.6% last month
Eurozone ZEW Economic Sentiment: 10:00AM
Federal Open Market Committee member Richard Clarida speaks: 4:15PM
FOMC member Raphael Bostic speaks: 5:30PM


Interbank rates:

GBP/USD – 1.3603
GBP/EUR – 1.1760
EUR/USD – 1.1566
USD/CAD – 1.2477

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