Market Brief: Former Trump staffers indicted

The most high profile is President Trump’s former campaign chairman, Paul Manafort, who’s been charged for conspiracy and money laundering while others include an ex-foreign policy advisor and a business partner of Mr Manafort. Much has been made of the ex-FBI Director Robert Mueller’s special investigation into the Russian affair and yesterday’s charges may yet just be the beginning. It’s hard to tell whether the Trump camp feel they can now draw a line under this saga but with one of the defendants already pleading guilty and presumably fully cooperating with the authorities, there could yet be further revelations.
Back home, under fire Chancellor Philip Hammond, has warned his cabinet colleagues he will not break his fiscal rules to increase public spending in next month's Budget. Despite heavy pressure for Mr Hammond to loosen austerity, the Chancellor's allies say he has "no room for manoeuvre" and he fears that investors, already worried by Brexit, will be spooked if he abandons a fiscal framework adopted only a year ago. Claims at the weekend that the Budget will be "BIG and BOLD" have raised eyebrows in the Treasury, as the Chancellor grapples with weak forecasts that could wipe out a large slice of the £26bn buffer he set aside to steer the economy through Brexit.
Staying in the UK, the next EU summit is scheduled to be held on 14th December and if talks ahead of this go according to plan, the PM and her Brexit team will be hoping for a green light from EU leaders to begin trade talks. Given the timeframe we expect to hear more announcements coming from the negotiations in the coming weeks which undoubtedly will have some bearing on sterling.

The day ahead

Looking ahead today we begin with EU Inflation & GDP data at 10am before we cross Stateside for Chicago PMI and Consumer Confidence data at 1.45pm and 2pm respectively.

Thought of the day

Happy Halloween! Today the 31st October is the spooky celebration observed each year in a number of countries - the eve of the Western Christian feast of All Hallows' Day, also known as All Saints' Day. Not many would know that the Halloween we experience today actually originated in the Celtic fringes of Britain and has been adapted over the decades. The origins of trick or treating and dressing up were in the 16th century in Ireland, Scotland and Wales where people went door-to-door in costume asking for food in exchange for a poem or song. We all know that currency markets can be spooky at times. Who will ever forget the night of the EU referendum, Black Friday or the day Lehman Brothers went bust? Whilst this week should be an interesting one with a raft of event risk PMI data, FOMC, US Non-farm payrolls, not to mention the first possible UK rate hike in over 10 years, people often ignore that beneath the surface, something really spooky often lurks … Could it be a Korean war, an impeachment or even something not currently grabbing the headlines? On a day like today perhaps this is not just a reminder for you to stock your sweets cabinet but also to revisit your FX strategy. Depending on your risk appetite and hedging objectives your Investec Dealer can provide you with an all singing and dancing currency treat!