'Big Bang 2.0' first steps
Today's news headlines:
'Kwasi Kwarteng seeks to scrap bankers' bonus cap to boost City of London'. In an attempt to entice top global talent back into London offices, UK chancellor, Kwasi Kwarteng, has announced his intention to scrap the cap on bankers' bonuses. The cap, introduced after the 2008 financial crisis, limits annual payouts to double that of a banker's basic salary. Boris Johnson decided against removing the cap during his tenure as PM over fears of political backlash. Still, Kwarteng has argued that the change will boost the City of London's global competitiveness and will be a decisive step in his 'Big Bang 2.0' approach to post-Brexit City regulation. The Chancellor is due to deliver a mini-Budget next week. (Financial Times).
'US and EU step up pressure on Turkey over Russia sanctions'. The US has focused on Turkey as a potential target for the evasion of Russian sanctions after five of the country's largest banks have integrated Mir, Russia's domestic payment system, which was developed as an alternative to Visa and Mastercard. As western capitals move towards tighter and more restrictive sanctions against Russia, Turkish President Recep Tayyip Erdogan has followed a 'balanced' approach to the conflict in Ukraine and pledged to deepen economic relations with Moscow. Two of the five Turkish banks, DenizBank and Halkbank, are notorious for their alleged roles in a scheme to evade US sanctions on Iran dating back to 2010, leading to concerns that the Turkish banking sector will become a potential backdoor for illicit Russian finance. (Financial Times).
US stocks opened in the green this morning as markets await the retail, manufacturing and unemployment data later this afternoon which could see some volatility for the Dollar. After the Buck's rally off the back of Tuesday's hotter-than-expected inflation data out of the US, GBP/USD has steadied at around the 1.1550 level.
Australian Unemployment rate: 3.5% vs 3.4% previously.
French Final CPI m/m: 0.5% vs 0.4% previously.
US Retail Sales m/m: 1:30PM
US Unemployment claims: 1:30PM
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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.