Energy crisis deepens

Today's news headlines: 

‘Fed official warns of “extreme” market reaction unless debt ceiling raised’. John Williams, President of the New York Fed, has spoken out on the US debt ceiling and emphasised the severity of a government default. Mid-October looms as many believe this is the earliest that the US government could begin defaulting if the debt ceiling is not raised. If the government is no longer meeting obligations, the potential for a contraction in liquidity and a drop in investor confidence is a likely outcome. A move away from treasuries to cash holdings could mirror moves seen at the onset of the Coronavirus pandemic when the $22tn debt market seized up, leading to Federal Reserve intervention. (Financial Times)

‘UK fuel crisis threatens to hit health services and industry’. Panic buying of petrol has led to UK medical workers calling for priority as the majority of the 8,000 petrol stations in the UK have been left empty. Industry bodies have also called to designate certain fuel stations for ‘essential users’ only as the situation continues to spiral. Army tanker drivers have begun training on how to operate the vehicles but have yet to be given a date for the rollout. The government, with special advice from fuel bodies, is expecting the situation to ease over the next week. (Financial Times)


Today

US markets were mixed on Monday as the S&P 500 closed 0.28% lower while the Dow Jones pushed 0.21% higher. The global squeeze in energy prices continues as Brent crude oil jumped above $80 per barrel for the first time in three years during the Asian session, rising 55.00% year to date. There’s little change to report in currency markets as tight trading ranges are maintained.

Events

Australia Retail Sales m/m: -1.7% vs -2.7% last month
Bank of Japan Core Consumer Price Index y/y: 0.3% vs 0.2% last month
German Gfk Consumer Climate: 0.3 vs -1.1 last month
European Central Bank President Christine Lagarde speaks: 1:00PM
Monetary Policy Committee member Catherine Mann speaks: 1:50PM
Federal Open Market Committee member Charles Evans speaks: 2:00PM
Federal Reserve Chairman Jerome Powell testifies: 3:00PM
US CB Consumer Confidence: 3:00PM
FOMC member Michelle Bowman speaks: 6:40PM
FOMC member Raphael Bostic speaks: 8:00PM


Interbank rates:

GBP/USD – 1.3693
GBP/EUR – 1.1721
EUR/USD – 1.1683
USD/CAD – 1.2624

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