UK: Reeves Looks To Have Survived Rental Blunder, But Comes At Bad Time
Chancellor of the Exchequer Rachel Reeves looks likely to survive a media furore surrounding her not obtaining the proper permissions to rent out her family home after moving into the chancellor's dwelling at No.11 Downing St. after last year's general election. Initially reported in the Daily Mail, Reeves did not obtain a 'selective' rental licence, required by some English councils. Reeves outlined the issues in a letter to PM Sir Keir Starmer in which she "sincerely" apologised for her "inadvertent error". In reply, Starmer said that he was content that the "matter can be drawn to a close" after consulting the Independent Adviser on Ministers' Interests Laurie Magnus, who said he would not be launching an investigation.
- Leader of the main opposition centre-right Conservative Party, Kemi Badnoch, has called for Reeves to resign. At present, the pressure does not appear to be as intense as that faced by erstwhile Deputy PM Angela Rayner in September after revelations of her tax affairs came to light and she stepped down from the Labour frontbench.
- Nevertheless, the story comes at an inopportune time for Reeves and Starmer. With less than a month until the 26 November budget, there is significant focus on whether the gov't will break its manifesto pledges not to raise income tax, National Insurance, or VAT. Headlines regarding potential financial impropriety by the very individual presenting the budget could further sour public opinion towards the gov't.
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FOREX: Yen Recovery Extends, GBPJPY Testing Below 50-day EMA
- Rising odds of a US government shutdown following the remarks from VP Vance have continued to weigh on the US dollar to start the week. USDJPY has been hardest hit, extending the week’s pull lower to around 1.3% at typing as spot consolidates back below 148.00.
- The move down appears technically corrective and initial support to watch lies at 147.59, the 50-day EMA. Stronger pivot support has been defined at 145.49, the Sep 17 low.
- We did highlight GBPJPY as a potentially vulnerable candidate to further yen demand, and the significance of the 50-day EMA. The cross is currently attempting to break below the average, which intersects at 198.98, and the next downside target would be 195.04, the August low.
- While the US shutdown and potential implications for US data releases remains the focus, it is worth highlighting that overnight the BOJ released the summary of opinions. The disclosures gave no clear signal of an October move, with most members aside from Naoki Tamura and Hajime Takata – who dissented and proposed a hike – seeing little urgency.
- Still, some members cited diminishing external risks and rising domestic pressures as reasons to shift. "Given this, the Bank may return to its monetary policy stance to raise the policy interest rate, and adjust the level of real interest rates that are currently low compared with overseas economies.”
METALS: A $60 reversal in Gold, Platinum, Palladium, Silver are through the lows
- Just over a $60 reversal in Gold after it printed a new all time record high just short of $3900.00, managed a $3871.72 high.
- There was a couple of quick lower legs that could suggest some profit taking, or some long cover, the first circa $3838.00 and the second around $3825.00.
- Gold is eyeing a test back down to $3800.00.
- As Oppose to the Dollar, it seems that the fast leg lower in Platinum and now Palladium and Silver may have helped.
SONIA OPTIONS: Call Fly vs Put
SFIZ6 96.25/96.75/97.00cfly vs SFIM6 96.00p x2, traded 7.75 for the fly in 2.5k.
