Today's news headlines:
'UK Lobbies Call for Once 'Unthinkable' Plan on Energy Crisis'. This Friday, the energy regulator Ofgem will announce the new average household bill, which is set to increase to over £3,500—an 80% rise. This has prompted separate calls from both the Resolution Foundation and the British Chambers of Commerce for 'unthinkable' pandemic-style emergency support for households and businesses. Record high natural gas prices, almost ten times the average of the last decade, have added to businesses' woes, with confidence levels in freefall. The impending increase in costs will pile pressure on the next UK prime minister, with the country already heading towards a recession. (Bloomberg)
'China Adds 1 Trillion Yuan More of Stimulus to Rescue Growth'. Faced with long-lasting damage from Covid-19 policies and an extended property market slump, China's state council outlined a new policy package taking the total support to $146bn. State policy banks will receive a further 300bn Yuan to fund infrastructure projects, which may not be enough according to economists at Goldman Sachs. Their take was that policy easing hadn't come quickly enough to quell the deterioration in the economy and won't cause them to upgrade growth forecasts above the 3% they've projected. Asian markets also refused to get carried away by the news, with Shanghai's Composite Index rising 0.2%. (Bloomberg)
Despite China's stimulus leading to small gains in US and European equity futures, anxious investors are still looking to the Jackson Hole Symposium for policy guidance from the world's central bankers. In Europe, natural gas prices have surged to fresh highs, intensifying the current energy crisis.
German final Gross Domestic Product q/q: 0.1% vs 0.0% previously
German ifo Business Climate: 9:00AM
European Central Bank Monetary Policy Meeting Accounts: 12:30PM
US preliminary GDP q/q/: 1:30PM
US Weekly Jobless Claims: 1:30PM
Jackson Hole Symposium: Day 1
Reserve Bank of New Zealand Gov Orr speaks: 11:30PM
GBP/USD – 1.1840
GBP/EUR – 1.1825
EUR/USD – 1.0015
GBP/CAD – 1.2920
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*Indicative interbank rates taken on the day of writing. Please speak to your Dealer to find out the current rates available for you.