Germany’s energy package could cost up to €200 billion, Truss set to rally conservative membership behind her, US demand for labour shows signs of cooling.
October 5, 2022
GBP/USD 1.1402 GBP/EUR 1.1471 EUR/USD 0.9940 USD/CAD 1.3561 EUR/CHF 0.9772 EUR/SEK 10.8419 EUR/NOK 10.4800 EUR/DKK 7.4390 USD/ILS 3.5345 AUD/USD 0.6485 NZD/USD 0.5729 USD/SGD 1.4225 USD/JPY 144.48 USD/CNH 7.0439 USD/INR 81.5200 EUR/ILS 3.5132 GBP/ILS 4.0299 USD/ZAR 17.7053
Liz Truss will attempt to rally the conservative membership today, following two weeks of fractious debate over the government’s fiscal plan. This follows Kwarteng’s admittance that his fiscal plan caused a ‘little turbulence’ when referring the reaction which saw the pound plummet and gilt yields surge to levels that required BoE intervention.
Concerns remain over the UK’s current account deficit which widened to 7.2% of GDP in 1Q 2022 in the first quarter of 2022. The latest data showed it remains at 5.5% which is wide compared to historical standards. The pound slipped through this morning by 0.5%.EUR
EU nations agreed on the new Russia sanctions package, which includes a new oil prices cap. The sanctions will add a ban of shipping Russian oil, unless it had been priced at or under a level set by G7 states.
Berlin stands ready to borrow up to 200 billion euros to shelter the economy against high energy costs. The support amounts to roughly 5% of GDP. Scholz government are yet to shed any light on how the package will be used.USD
The Federal Reserve warn that the fight against inflation could be prolonged and top officials dissuade markets of an RBA style pivot. Friday’s payrolls data could still affect that message, however non-farm payrolls data has remained robust in recent months.
US demand for labour might be showing signs of cooling, with the ratio of job vacancies to unemployed persons falling sharply through august from 1.97 to 1.67. The dollar has strengthened slightly intraday with the DXY index trading 0.4% higher.ASIA/PACIFIC
Taiwan has pledge to work closely with the west to ensure that China’s military are unable to acquire state-of-the-art technology from Taiwan, home to the world’s largest semiconductor foundry.
Oil demand in China could pick up as Beijing released trade allowance enabling its vast refining industry to ship in more crude and export more fuel. The slowdown in Chinese economic activity through 2022 has provided some relief to global oil prices.ILS
On Monday the Bank of Israel raised its benchmark rate to 2.75% to combat high inflation, the highest interest rate level since 2011. USDILS trades 0.5% higher as we print.Data & Events
Eurozone Services PMI
UK Services PMI
Russia 2Q GDP
Truss speaks at Conservative Conference.
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