The pound dropped by about 0.1% against the US dollar on Tuesday, at 1.30, the lowest value in more than three weeks. The slip reflects a shift in investor sentiment, with traders paring back their bets on sterling in favour of the safe-haven US currency.
This trend has been bolstered by robust US economic data and hawkish comments from the Federal Reserve, contrasting sharply with the dovish stance expressed by Bank of England governor Andrew Bailey.
Investor unease is further exacerbated by the upcoming government budget announcement later this month, raising concerns about potential tax hikes and spending cuts.
Meanwhile, the US Dollar Index (DX-Y.NYB), which gauges the dollar’s strength against six major currencies, has extended its winning streak for six consecutive trading days, surpassing the 102 mark.
Read more: FTSE 100 LIVE: Stocks decline across Europe as UK borrowing costs escalate
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Looking ahead, investors will focus on the US Consumer Price Index (CPI) data for September, set to be released on Thursday. This inflation data is expected to shed light on the Federal Reserve’s potential interest rate decisions in November.
Sterling was also lower against the euro (GBPEUR=X) in early trading, slipping 0.1% to €1.19.
Gold prices have slipped for the fifth consecutive day, hitting an over one-week low during early European trading on Tuesday, edging closer to the critical $2,630 support level.
At the time of writing, spot gold was down 0.3% at $2,635.43 per ounce, while US gold futures slipped 0.4% to $2,656.50.
This downward trend is largely attributed to diminishing expectations for a substantial interest rate cut by the Federal Reserve in November, which has undermined demand for the non-yielding yellow metal.
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Despite this decline, gold’s downside remains somewhat cushioned by a modest weakening of the US dollar, which typically supports USD-denominated commodities.
Read more: Chancellor Reeves urged to change fiscal rules in budget to unlock £57bn
Geopolitical tensions, particularly ongoing conflicts in the Middle East, may also provide some support for gold prices as investors seek safe-haven assets. However, many traders are likely to adopt a cautious stance, refraining from making aggressive directional bets ahead of the upcoming release of the FOMC meeting minutes on Wednesday.
In addition, key economic indicators such as the US Consumer Price Index (CPI) and the US Producer Price Index (PPI), scheduled for release on Thursday and Friday respectively, are expected to influence short-term dollar dynamics and offer new momentum for gold prices.
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Oil prices have slipped after hitting a six-week high but are still hovering around the $80 mark amid escalating fears over the conflict in the Middle East.
Brent crude futures dropped 1.5% to $76.69 a barrel, while US West Texas Intermediate (CL=F) crude fell 1.9% to $75.68 per barrel during early European trading.
Brent has been rising since Israel decided to take military actions against Hamas in Gaza, as well as tensions with Hezbollah in Lebanon and the Houthis in Yemen, all of which are linked to Iran. Since the attack on Israel on October 7 2023, these developments have served as catalysts for rising oil prices.
However, in recent weeks, the market had experienced some stability amid concerns about weakened global demand, particularly from China, and the potential risks of further disruptions to shipping in the oil-rich region.
Read more: Stocks to watch ahead of the October budget
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But further gains in crude were held back by the dollar, as expectations of smaller US interest rate cuts boosted the greenback.
Traders were also watching for the reopening of Chinese markets after a week-long holiday, as the world’s biggest oil importer announced a slew of major stimulus measures.
Meanwhile, the FTSE 100 (^FTSE) was lower at the open, losing 1.2%% to 8,202 points. For more details check our live coverage here.
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Baker McKenzie today announced that leading project finance lawyer Matthias Schemuth has joined the Firm’s Singapore office* as a Principal and Asia Pacific Co-Head of Projects in its Finance & Projects practice, alongside Partner Jon Ornolffson in Tokyo.
Matthias joins the Firm from DLA Piper, bringing more than 20 years of experience in the energy and infrastructure sectors across Asia Pacific. He advises sponsors, developers, commercial banks, multilateral lending agencies, and export credit agencies on the structuring and financing of large-scale projects. His practice also spans international banking, structured commodity and trade finance, with a strong focus on emerging markets. Matthias has been consistently recognised by Chambers Asia Pacific and Who’s Who Legal as a leading project finance practitioner.
James Huang, Managing Principal of Baker McKenzie Wong & Leow in Singapore, said: “We are excited to welcome Matthias to our team. His expertise and proven record in managing teams will be invaluable as we expand our regional and global finance offerings for clients.”
Emmanuel Hadjidakis, Asia Pacific Chair of Baker McKenzie’s Banking & Finance Practice, commented: “Asia Pacific is seeing strong momentum in infrastructure development, energy transition investments, and cross-border project financing, much of it centred in Singapore. Having Matthias on board will further enhance our ability to help clients seize opportunities in the region’s evolving energy and infrastructure markets.”
Steven Sieker, Baker McKenzie’s Asia Chief Executive, added: “Matthias’s appointment underscores Baker McKenzie’s continued commitment to investing in exceptional talent across key markets to support our clients in navigating today’s increasingly complex business and regulatory environment.”
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Matthias said: “I’m thrilled to join Baker McKenzie and contribute to its strong growth in Asia Pacific. The Firm’s global reach and local depth provide an unparalleled platform for delivering innovative projects and financing solutions to clients in this dynamic region.”
With more than 2,700 deal practitioners in more than 40 jurisdictions, Baker McKenzie is a transactional powerhouse. The Firm excels in complex, cross-border transactions; over 65% of our deals are multijurisdictional. The teams are a hybrid of ‘local’ and ‘global’, combining money-market sophistication with local excellence. The Firm’s Banking & Finance lawyers are ranked in more jurisdictions than any other firm by Chambers.
Matthias’s hire continues the expansion of Baker McKenzie’s global team. His joining follows the recent arrivals of Carole Turcotte in Toronto; Tom Oslovar in Palo Alto; Jenny Liu in New York and Palo Alto; Helen Johnson, Mark Thompson, Nick Benson, Kevin Heverin, James Wyatt and Michal Berkner in London; Jan Schubert in Frankfurt; Todd Beauchamp and Charles Weinstein in Washington DC; Dan Ouyang, Winfield Lau, and Ke (Ronnie) Li in Beijing, Shanghai, and Hong Kong; and Alexander Stathopoulos in Singapore.
*Baker McKenzie Wong & Leow is the member firm of Baker McKenzie in Singapore
The Federal Reserve gave investors an early Christmas present by lowering interest rates by 25 basis points (i.e., 0.25%) marking its third rate cut this year. In the past, a change like this in the “long end” of the interest rate yield curve has triggered a predictable, investable pattern. Typically, this pattern would be bearish for finance stocks, particularly banks—investors would buy bank stocks when rates rose and sell them as rates fell….
Dozens of protesters from the “Religious Zionist Reservists Forum” and the “Shared Service Forum” demonstrated Saturday evening outside the home of Finance Minister Bezalel Smotrich in Kedumim.
The protesters arrived with a direct and pointed message, centered on a symbolic “draft order,” calling on Smotrich to “enlist” on behalf of the State of Israel and oppose what they termed the “sham law” being advanced by MK Boaz Bismuth and the Knesset’s haredi parties.
Among the protesters in Kedumim were the parents of Sergeant First Class (res.) Amichai Oster, who fell in battle in Gaza. Amichai grew up in Karnei Shomron and studied at the Shavei Hevron yeshiva.
Protesters held signs reading: “Smotrich, enlist for us,” along with the symbolic “draft order,” calling on him to “enlist for the sake of the State’s security and to save the people’s army – stand against the bill proposed by Bismuth and the haredim!”
Parallel demonstrations were held outside the homes of MK Ohad Tal in Efrat and MK Michal Woldiger in Givat Shmuel.
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Representatives of the “Shared Service Forum” said: “We are members of the public that contributes the most, and we came here to say: Bezalel, without enlistment there will be no victory and no security. Do not abandon our values for the sake of the coalition. The exemption law is a strategic threat, and you bear the responsibility to stop it and lead a real, fair draft plan for a country in which we are all partners. It’s in your hands.”
