Let's just turn the page
Today's news headlines:
'Sunak to face renewed calls to fire Zahawi over £5mn tax dispute'. Conservative Party Chair Nadhim Zahawi was in a dispute with HMRC over unpaid tax, but the matter seems far from clear. Rishi Sunak had believed that a settlement was made and the dispute closed during the Johnson administration, when Zahami was appointed Chancellor for a short stint. The PM must decide whether it is worth following this trail and losing the media cycle for another week or whether he should cut his losses and focus on his agenda. (Financial Times)
'Hunt examines new fiscal powers for mayors in England'. Chancellor Jeremy Hunt is considering several approaches to devolving power to regional mayoralties, including allowing them to retain a portion of local taxation. The idea is to enable greater autonomy for local spending to achieve objectives, but in return, the Mayor would make a fiscal budget agreement with the Treasury over total resource. More independence is viewed favourably by the public, who are frustrated with Whitehall's broad-brush decision-making. Still, the crucial detail will be about accountability, due diligence, and enforcement of these new hotbeds of power. (Financial Times)
The Dollar Index held to lows overnight while the Euro gained against Sterling into today's open. Crude oil pulled back from the 100-day moving average during yesterday's session, where it had been staging a 10-Dollar comeback from $77 per barrel January lows. Yesterday's PMI data releases were quite interesting. EU gains overall: Services PMI registering expansion. UK PMIs show contraction across the board, despite a decline in factory gate prices in December. US PMIs also showed contraction, albeit improved readings for both measures.
AU CPI y/y: 8.4% vs 7.3% last month
UK PPI Input m/m: -1.1% vs -0.2% last month
UK PPI Output m/m: -0.8% vs -0.1% last month
EU German IFO Business Climate: 9:00 AM
EU Belgian NBB Business Climate: 2:00 PM
CA Bank of Canada Policy Report: 3:00 PM
CA Bank of Canada Press Conference: 4:00 PM
GBP/USD - 1.2325
GBP/EUR - 1.1320
EUR/USD - 1.0885
USD/CAD - 1.3365
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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.