Prime Minister fails to re-assure markets with conference speech

GBP

Sterling ended a recent run of appreciation on Wednesday declining 2% against the US dollar and 0.5% against the euro as Prime Minister Liz Truss delivered her speech at the annual Conservative party conference in Birmingham.

Investors had hoped that Truss would use the conference as an opportunity to re-assure markets of the government’s fiscal discipline amid widespread concerns related to the latest mini-budget. Instead, the Prime MinisterÔÇÖs speech lacked the required substance to ease market concerns. The PM emphasized┬áa message of unity following┬áthe release of latest opinion polls which show┬áthe Conservatives trailing the Labour party by an average of 25 points and her being┬áless popular than her predecessor Boris Johnson.

Sterling received a small boost during early trading as the S&P Global Composite PMI report for September shows an increase to 49.1 against expectations of 48.4.

USD

The dollar gained on Wednesday as the US Services industry showed another month of expansion in September. According to this data, ISM services PMI for September grew to 56.7 against expectations of 56, whilst Services Employment presented a modest improvement to 53 against expectations of 49.6.

Added to the release of strong services figures, US employment data continues to show robustness. ADP Employment figures for September indicate private sector jobs increased to 208,000 from 185,000 previous beating expectations of 200,000.

Key announcements

09:00┬á– EUR┬á–┬áRetail Sales (YoY) (Aug) consensus -1.7%