Oct 5, 2022
VOT Research Desk
Key News – Insights and Analysis
UK and US non-manufacturing PMIs are under review, with the 1.15 resistance level in scrutiny.
The U-turn by Chancellor Kwasi Kwarteng on Monday and a possible Fed pivot following misses on key U.S. economic data (ISM manufacturing PMI and job openings) have both contributed to the recent appreciation of the pound against the dollar. Markets were also shocked by a 25-bps rate hike by the Reserve Bank of Australia (RBA), which was initially interpreted as a warning sign for the Fed but was quickly dispelled by Fed officials yesterday.
Fed officials still believe that a great deal more needs to be done to fully address the inflationary problem, despite the fact that the labor market is showing signs of cooling as a result of the aggressive rate hikes. However, if U.S. PMIs miss estimates, today’s services PMI data for both the UK and the U.S., where services make up the majority of GDP, could contribute to lower Fed re-pricing
Economy Activity Schedule
Later today, PM Liz Truss is scheduled to discuss her internal economic policies. This speech is important to the Conservative Party’s future because it aims to regain some confidence.
