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Evans to Old Trafford?

Good morning

Asian markets ended generally lower but currency markets reasonably stable overnight. Inflation still remains one of the key talking points and it has been noted that markets are now pricing in two 25bps rate rises by end 2022, remember earlier in October the expectation was for just one rise in this time. Feds Powell mentioned Friday that there was a concern inflation could remain elevated as supply chain issues continue to worsen. US dollar reasonably unmoved by this hawkish tone, perhaps calmed by Yellens comments over the weekend making it clear she believes US are not losing control of inflation.

UK budget this week, won’t go into what is expected but I do think it will be one of the more closely watched budgets of recent years although I’m sure Sunak will be eager to avoid huge changes.

Still talk of compromise over ECJs role in NI protocol, UK’s Frost and EUs Sefcovic will meet again tomorrow to discuss further, still a risk that negotiations fail to produce results with some suggestions that UK and EU are still far apart on some big issues, but it does seem as though both sides are interested in sealing an agreement. Meanwhile EUs ex-Brexit negotiator Barnier still in the running to rival Macron in the French elections next April, his campaign is underway and gaining support.

GBPUSD currently 1.3790, EURGBP 0.8455 (GBPEUR 1.1825) and EURUSD 1.1660.

Turkish Lira weakens further, with USDTRY trading up to 9.85 on news Erdogan orders the expulsion of US and other western ambassadors after they demanded the release of Osman Kavala who has been imprisoned since 2017, suspected of having a role in an attempted coup. There is a bit of uncertainty as to whether the expulsions, which include EU and NATO allies, have actually taken place

In Covid news, China has locked down thousands of people in an attempt to contain a recent outbreak. However there is some talk that UK ministers are looking at a report which suggests infection rates could fall after a spike in winter which is a reason for them not introducing any further restrictions at this stage despite rising cases.

It is half term this week for much of the UK and judging by the number of email ‘out of office’ replies I received on Friday it seems as though many people are taking a bit of a break.

Sport over the weekend was rather mixed, Spurs a little unlucky to come away with nothing from their match against West Ham, but attention is very much on Ole, the Man Utd manager after their dismal performance against a rampant Liverpool yesterday. Ole’s job is very much on the line right now. One of the names listed as a potential to take over the Man Utd helm is relatively unknown ‘Evans’, after leading his young team to a 6-3 victory in a top of the table clash this weekend to retain our 100% record. Just waiting for that phone to ring………….

- 09.00 German IFO

- 13.30 US Chicago fed national activity index

- 14.00 BoEs Tenreyro speaks

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