Under control

Today's news headlines: 

‘China home prices fall as property slowdown threatens economic outlook’. China’s red hot property market has taken a knock over the last year as distress around property developers has continued to build. New home prices saw a fall for the first time in half a decade in September, followed by another drop of 0.25% in October. The Chinese government has been fighting to get a handle on aggressive debt growth in the sector, but liquidity fears are now the main focus. Just last year, the government introduced mortgage caps to limit lending amid property market bubble fears. Now the damage is somewhat known, it’s thought these measures will begin scaling back amid data showing China grew at its slowest pace for a year in the third quarter. (Financial Times)

‘Yellen says inflation will stay high until Covid is under control’. US consumer prices have increased at their fastest rate since 1990, with the headline reading hitting 6.2% in October. US Treasury Secretary Janet Yellen has been increasingly vocal on the need to control Covid to tame inflation. Supply chain bottlenecks have made things much more difficult for businesses; add the pressure of rising wages, and things look bleak for the bottom line. The debate in government is still raging on whether Joe Biden’s new $1.75tn social spending bill will add to the inflation issue. Many Americans believe that to be the case; a poll by the Washington Post showed around 70.0% were unhappy with the current state of the economy. (Financial Times)


Today

The Euro Stoxx 600 climbed 0.30% on Friday, hitting record highs intra-day. The FTSE 100 was under pressure, falling 0.49%. Asian markets were relatively mixed at the start of this week as US inflationary fears look to have been short-lived. Meanwhile, major pairs have started the week relatively unchanged in what looks like a quiet day for economic data.

Events

UK Rightmove House Price Index m/m: -0.6% vs 1.8% last month
China Retail Sales y/y: 4.9% vs 4.4% last month
China Industrial Production y/y: 3.5% vs 3.1% last month
UK Monetary Policy Committee member Jonathan Haskel speaks: 9:30AM
Canada Manufacturing Sales m/m: 1:30PM
US Empire State Manufacturing Index: 1:30PM


Interbank rates:

GBP/USD – 1.3416
GBP/EUR – 1.1718
EUR/USD – 1.1450
USD/CAD – 1.2532

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