Shift in perspective

Today's news headlines: 

‘Australian central bank tightens monetary policy to deal with price surge’. The Reserve Bank of Australia said on Tuesday that it will abandon its policy to keep three-year bond yields at 0.10%, making it one of the first central banks to tighten monetary policy. The RBA allowed yields to rise through the cap last week, with the three-year yield reaching 0.98%. Short term interest rates are unlikely to be hiked until inflation is hovering consistently in the 2.00-3.00% region and the labour market is generating its own wage growth, things that will reportedly take some time. (Financial Times)

‘Global investors turn cautiously optimistic on China’. Investors have started to change their tune on China’s outlook with HSBC upgrading their rating to overweight, suggesting recent regulatory challenges and stock market selloffs have abated. Almost $1tn of market value has been lost since mid-February, as policy traps set by President Xi Jinping have left many technology and education firms seized in place since the goal of ‘common prosperity’ in China was pushed. Net inflows have continued to build since July, with almost $4bn a month being placed into onshore Chinese equity markets. (Financial Times)  


Today

The FTSE 100 started November with a 0.71% gain in a relatively quiet day for UK economic data. GBP/EUR has fallen around 0.75% over the last day, trading at €1.1765 this morning as markets await the Federal Reserve and Bank of England interest rate decisions later this week.

Events

Australia Interest Rate: 0.10% vs 0.10% previously
Switzerland Consumer Price Index m/m: 0.3% vs 0.0% last month
Eurozone final Manufacturing Purchasing Managers’ Index: 9:00AM
Canada Building Permits m/m: 12:30PM
Reserve Bank of New Zealand Financial Stability Report: 8:00PM
New Zealand Employment Change q/q: 9:45PM
New Zealand Unemployment Rate: 9:45PM


Interbank rates:

GBP/USD – 1.3641
GBP/EUR – 1.1761
EUR/USD – 1.1598
USD/CAD – 1.2398

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