Democrats almost reach agreement over Biden’s social spending bill

October 25, 2021

In our weekly Market Monday insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.

Negotiations in the US are continuing to advance surrounding President Biden’s social spending bill, as the infighting inside the Democrat party over the stimulus package appears to be settling with a deal near completion.

House Speaker Nancy Pelosi says that the party is “pretty much there” on the deal, which has undergone several revisions to reduce its cost from $3 trillion to under $2 trillion.

With an agreement within sight, plans are being made to vote on the deal and a further infrastructure bill in the coming weeks.

Elsewhere, UK inflation unexpectedly slowed to 3.1% year-over-year in September - down from the 3.2% registered in August but still well above the Bank of England’s 2% target. BoE chief economist Huw Pill said in an interview with the Financial Times that he would not be shocked to see UK inflation hit or exceed 5% in the coming months.

Eurozone business activity slowed for a third consecutive month in October, amid increasing supply-chain bottlenecks and ongoing coronavirus-related disruptions, according to early data for IHS Markit’s Purchasing Managers’ Index (PMI). The Eurozone PMI Composite Output Index fell to 54.3 from 56.2 in September. Activity in the manufacturing and services sectors remained above 50—the level denoting expansion—but average selling prices rose to the highest level since the survey began in 1998.

According to provisional data from Japan’s Ministry of Finance, the country’s export growth decelerated sharply in September, falling to 13.0% year on year from the previous month’s 26.2%. Positive contributors were steel, coking coal, and tech, while car shipments tumbled as supply chain disruptions in Southeast Asia caused by the coronavirus pandemic and the continuing global semiconductor shortage forced automakers to cut production.

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