Today's news headlines:

‘Pelosi Vows US Won’t Abandon Taiwan in Face of China Threats’. Despite the threat of military action, China’s response to House Speaker Nancy Pelosi’s Taipei visit came relatively muted, calming fears of outright aggression. On the latest leg of her Asian tour, Pelosi reaffirmed America’s commitment to the island’s democratically elected government and the enduring friendship between the two nations. Tensions remain heightened, with China announcing some trade sanctions and military tests in the waters and airspace surrounding Taiwanese territory. (Bloomberg)

‘UK Already in Recession With Outlook for Stagflation, Niesr Says’. The cost-of-living crisis has plunged Britain into recession, in a gloomy assessment from a leading think tank. The Deputy Director for Macroeconomics at the National Institute of Economic and Social Research commented that the ‘UK economy is heading into a period of stagflation with high inflation and a recession hitting the economy simultaneously’. It’s also estimated that 7 million households will be living paycheck to paycheck by 2024. The warning will serve as a stark reminder to both Rishi Sunak and Liz Truss that the UK government needs to go further to support those in need. (Bloomberg)

Today

The US Dollar mostly moved higher overnight on China-Taiwan tensions along with hawkish comments from Federal Reserve officials that now is not the right time to pivot on policy action. European and US equity futures showed little direction, with trade likely to remain choppy on the uncertain outlook for both geopolitics and central bank policy.

Events

China Caixin Services Purchasing Managers’ Index: 55.5 vs 54.5 previously
Spanish Services PMI: 53.8 vs 54.0 previously
Eurozone final Services PMI: 9:00AM
UK final Services PMI: 9:30AM
OPEC meetings: All day
US ISM Services PMI: 3:00PM

Interbank rates:

GBP/USD: 1.2173
GBP/EUR: 1.1977
EUR/USD: 1.0164
USD/CAD: 1.2863

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