On the horizon
Today's news headlines:
‘Fed minutes set to show breadth of support for higher peak rate’. After the last Federal Reserve Policy meeting, Chair Jerome Powell told the media that rates would probably have to go higher than September’s projections. Now, with today’s release of the November meeting minutes, investors will see just how unified the rest of the FOMC is with Chairman Powell’s view. We expect all to agree that rates should move higher, but the pace of hikes will be a key factor for investors. Recent data indicates that the Fed will probably look to slow the pace of tightening, with price pressures likely to ease in the coming months. This could spell more Dollar weakness in the near term. (Bloomberg)
‘UK Tory woes return as Sunak struggles with policy and personnel’. Rishi Sunak is facing Tory rebellions on multiple policy fronts as he struggles to gain the ‘stability and unity’ promised when he entered Downing Street. The Prime Minister pulled a vote on housebuilding plans, due next week, after 47 Conservatives signed an amendment which threatened to defeat the government. This follows criticism over Sunak and Hunt’s plans for tax rises in the Autumn Statement and reports that they were seeking closer ties with the EU once again. (Bloomberg)
US manufacturing data fell below forecasts yesterday, reaffirming the peak inflation narrative; this helped the Dollar take another leg lower against its G-10 trading partners. The Kiwi Dollar gained after the RBNZ raised rates 75bps, while the Pound strengthened on better-than-expected Public Sector Net Borrowing data.
RBNZ Cash Rate: 4.25% vs 3.5% previously
French Flash Services PMI: 8.15AM
German Flash Services and Manufacturing PMI: 8.30AM
UK Flash Services and Manufacturing PMI: 9.30AM
US Durable and Core Durable Goods Orders: 1.30PM
US Weekly Jobless Claims: 1.30PM
US Flash Services and Manufacturing PMI: 2.45PM
US FOMC Meeting Minutes: 7.00PM
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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.