U-turn for Truss
Today's news headlines:
'Truss drops tax cut for highest UK earners to fend off revolt'. Just ten days after announcing the latest round of fiscal support, Prime Minister Liz Truss and UK Chancellor Kwasi Kwarteng have opted to reverse the abolition of the 45% income tax rate. This comes following a turbulent week for markets which saw the Pound drop to an all-time low against the US Dollar of $1.0350 and sent UK gilts into free fall. Questions will be asked of the newly formed Conservative government with Labour currently 19 points ahead in the polls with over half of the public unhappy with the job Liz Truss is doing. (Bloomberg)
'Oil jumps as OPEC+ mulls biggest production cut since pandemic'. Oil has been subdued at under $100 per barrel since the end of June, and markets now fear another move to the upside is a risk. OPEC+ is reportedly planning to cut oil production by one million barrels a day in its meeting this week to shore up the steady fall we've seen in the last few months. WTI is up 3.50% this morning on the news. (Bloomberg)
European stocks have followed Asia lower this morning while US equity futures point to modest gains. UK gilts have recovered after their beating last week, with yields across the curve falling. The Pound is supported by news of a tax cut reversal this morning while the Dollar Index trades flat on the open.
Japan Tankan Manufacturing Index (Q3): 8 (est. 11)
Japan Tankan Non-Manufacturing Index (Q3): 14 (est. 13)
Switzerland CPI MoM (Sep): -0.2% (est. 0.1%)
US ISM Manufacturing PMI (Sep): 3:00PM
UK Monetary Policy Committee Member Catherine Mann speaks: 7:00PM
US Federal Open Market Committee Member John Williams speaks: 8:10PM
GBP/USD – 1.1198
GBP/EUR – 1.1414
EUR/USD – 0.9810
USD/CAD – 1.3756
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.