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Sinking into the abyss

Today's news headlines:

‘UK Firms Face Distress Without Government Energy Help, CBI Says’. While helping consumers should remain the number one priority, many businesses could slip into distress without government support, according to the Confederation of British Industry’s Chief Policy Director, Matthew Fell. His comments that the government needs to take speedy and decisive action ramps up the pressure on both candidates vying to replace Boris Johnson as head of the UK’s government. The CBI sees two-thirds of companies having increased costs in the next three months due to energy, with a third anticipating increases of more than 30%. (Bloomberg)

‘Business Activity Slumps Globally, Feeding Recession Concerns’. Yesterday’s global Purchasing Managers’ Index data highlighted the effects of rising prices and the war in Ukraine as the world begins to tip into recessionary territory. Business activity in the US contracted for the second-straight month, falling to the weakest level since May 2020, while manufacturing activity in the UK and Europe also fell. The data out of Europe points to a third-quarter recession, as per S&P Global Economist Andrew Harker. Meanwhile, beyond the headline US print, firms’ expectations for the future did improve, with signs of supply chain normalisation appearing. (Bloomberg)


Markets continue to head south as we approach tomorrow’s Jackson Hole Symposium, with US and European equity futures declining while the US Dollar remains supported at current levels. Investors await Jerome Powell’s speech on Friday for a sense of Federal Reserve hawkishness in the face of mounting challenges.  


US Durable and Core Durable Goods Orders: 1:30PM
US Pending Home Sales: 3:00PM
New Zealand Retail Sales: 11:45PM

Interbank rates*:

GBP/USD – 1.1809
GBP/EUR – 1.1878
EUR/USD – 0.9943
GBP/CAD – 1.2982


Please contact your Dealer about any upcoming FX requirements you may have, or call +44 (0)20 3465 8200. 

*Indicative interbank rates taken on the day of writing. Please speak to your Dealer to find out the current rates available for you.