Trouble ahead

Today's news headlines: 

‘UK businesses warn of “autumn storm” of shortages, costs and taxes’. Many UK businesses have started warning members of parliament of the dangers of escalating costs heading into the autumn as support schemes implemented by the Treasury begin to wind down. Rising wages, input costs moving higher due to supply chain bottlenecks, and a skills shortage all have the potential to stifle economic activity as we move into the fourth quarter. The Institute of Directors is expected to report a sharp pullback in business confidence this month, with the index expected to fall to levels not seen since February 2021. (Financial Times)

‘Investment bank fees soar past $100bn on M&A boom’. The surge in mergers & acquisitions activity seen in the first half of 2021 has continued into Q3, as fees for the year pushed through $100bn marking a 46% rise year to date. The total value of these deals has also made a marked improvement, with the total value up 98% year over year. JPMorgan and Goldman Sachs have been the two major beneficiaries of this activity boom, with the pair taking home a combined $18bn in fees. This has been the result of a shift in corporate America as the preference for making deals has overtaken the desire for organic growth. (Financial Times)


Today

Most major indices closed lower yesterday as weak data out of China knocked sentiment; the S&P 500 closed 1.19% lower while Germany’s Dax Index fell 0.68%. The US 10-year Treasury yield has backed off slightly overnight to 1.48%. Cable remains contained below $1.35 while EUR/USD pushes towards the $1.16 handle.

Events

Japan Unemployment Rate: 2.8% vs 2.8% last month
German Retail Sales m/m: 1.1% vs -4.5% last month
German final Manufacturing Purchasing Managers' Index: 8:55AM
Eurozone Consumer Price Index flash estimate y/y: 10:00AM
Canada Gross Domestic Product m/m: 1:30PM
US Core Personal Consumption Expenditures Price Index m/m: 1:30PM
US Institute for Supply Management Manufacturing PMI: 3:00PM
US revised University of Michigan Consumer Sentiment: 3:00PM


Interbank rates:

GBP/USD – 1.3447
GBP/EUR – 1.1612
EUR/USD – 1.1580
USD/CAD – 1.2729

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