BOE issues stern warning to gilt markets, Israeli CPI expected to stabilise, Meloni struggles to find finance minister.
October 12, 2022
GBP/USD 1.0978 GBP/EUR 1.1313 EUR/USD 0.9704 USD/CAD 1.3810 EUR/CHF 0.9671 EUR/SEK 11.0155 EUR/NOK 10.4495 EUR/DKK 7.4390 USD/ILS 3.5697 AUD/USD 0.6268 NZD/USD 0.5595 USD/SGD 1.4379 USD/JPY 146.16 USD/CNH 7.1776 USD/INR 82.3150 EUR/ILS 3.4638 GBP/ILS 3.9188 USD/ZAR 18.1963
BoE governor issued a stern warning to gilt markets and specifically pension funds as the Bank of England’s emergency gilt purchasing scheme ends this week. The central bank has urged funds holding long-dated gilts to wind up positions that they can’t maintain. Market pressure is mounting on the BoE to extend the program beyond Friday. The uncertainty over the bond market drove sterling below $1.10 for the first time since Sept. 29. UK mortgage rates have risen four time faster than during the 2009 financial crisis.EUR
Giorgia Meloni’s landslide victory is running into reality as she struggles to form a coalition government, whilst the gas-dependent’s nations economic outlook worsens. Meloni has failed to find a finance minister since her Sept 25. Victory.
Bank of France governor has said that European interest rates will near 2% by the end of 2022 with sharp increases to frontload tightening. Villeroy has then hinted the ECB could take a more flexible approach to quantitative tightening.USD
The Federal Reserve minutes from the September meeting are expected to suggest that Fed Hawks and Doves are unusually aligned around the requirement to continue with jumbo rate hikes. Agreement is growing that taming inflation will ultimately involve economic hardship, This comes despite comments from President Biden that he believes a recession is unlikely. The minutes are also expected show insights into the concern of FOMC members that inflation is becoming persistent.ASIA/PACIFIC
The Bank of Korea raised its seven-day repurchase rate by half a percent, to a three-year high of 3%. The Won’s weakness was one of the main reasons for the outsized hike said the BoK governor.
Indian inflation is expected to have accelerated to 7.36% year on year in September from 7% in AugustILS
Israel’s CPI will print this Friday, one day after the US. Last month the index showed moderation for the first time this year. Market forecasts circle around a stabilisation through September.
USDILS trades -0.3% lower intraday.Data & Events
Several BoE and ECB speakers
OPEC monthly oil market report
EU energy ministers meet in Prague.
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