Tough road ahead

Today's news headlines: 

‘UK faces two years of labour shortages, CBI warns’. The Confederation of British Industry has warned labour shortages in the hospitality and construction sectors could last for up to two years, as the lack of skilled workers continues to wane on the economy. Many businesses have trimmed back operations with hotels limiting capacity, restaurants choosing between afternoon and evening opening times, and manufacturers not taking on as many projects as businesses struggle to find staff. The CBI has called on the government to provide free education for those occupations experiencing a shortage to help people return to work. (Financial Times)

‘ECB weighs slower bond purchases as economy rebounds’. The European economy has rebounded strongly, and now attention has turned to how the European Central Bank will taper the Pandemic Emergency Purchase Programme (PEPP). Many analysts believe the volume of tapering is not the concern, but rather what the ECB can expect after PEPP ends. The governing council is split with doves insisting some stimulus measures should be retained to curb inflation and supply chain pressures, while the hawks suggest average inflation over the next few years is in line with expectations. (Financial Times)


Today

The FTSE 100 fell 0.36% on Friday after a miss on US Non-Farm Payrolls, which helped push Sterling higher, trading just shy of $1.3850 against the US Dollar this morning. Yields have nudged higher, with the US 10-year Treasury above 1.32%, while EUR/USD has found support around $1.1870. US markets are closed today as the country celebrates Labor Day.

Events

German Factory Orders m/m: 3.4% vs 4.6% last month
Eurozone Sentix Investor Confidence: 9:30AM
UK Construction PMI: 9:30AM
MPC member Catherine Mann speaks: 12:10PM
US Bank Holiday: All Day


Interbank rates:

GBP/USD – 1.3851
GBP/EUR – 1.1666
EUR/USD – 1.1874
USD/CAD – 1.2529

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