BOE set to hike rates to 0.5%, European inflation highest on record.
February 3, 2022
GBP/USD 1.3553 GBP/EUR 1.2006 EUR/USD 1.1288 USD/CAD 1.2702 EUR/CHF 1.0411 EUR/SEK 10.3912 EUR/NOK 9.9608 EUR/DKK 7.4383 USD/ILS 3.1866 AUD/USD 0.7124 NZD/USD 0.6635 USD/SGD 1.3490 USD/JPY 114.71 USD/CNH 6.3667 USD/INR 74.8325 EUR/ILS 3.5968 GBP/ILS 4.3186 USD/ZAR 15.3732
Energy regulator Ofgem is likely to raise the cap on energy bills this morning, with a 50% increase widely expected. The Government are working on measures to assist those hardest hit by the surge, with an announcement likely in the coming days.
The BoE is expected to hike interest rates to 0.5% today to tackle ongoing inflationary pressures. If members vote for the increase, this will be the first back-to-back rise since 2004. Investors will be focused on any indications of further hikes from Andrew Bailey.
Sterling is trading 0.18% lower against the Dollar this morning, whilst FTSE closed yesterday up 0.63%.EUR
Eurozone inflation hit new records yesterday, defying expectations to print at 5.1%. This is likely to dominate the ECB meeting today, where interest rates are broadly expected to remain unchanged.
Markit Composite and Services PMIs for Germany and the Euro Area, improved on last months figures, despite falling slightly short of expectations.
The STOXX 600 closed up 0.45% yesterday. EURUSD is trading at down 0.07% intraday.USD
US public sector employment significantly missed expectations, shrinking by 301,000 jobs, against expectations of a 200k increase. This is the biggest drop since the pandemic began, likely bolstered by a rise in Covid cases with the Omicron variant.
All three of Biden’s Fed nominees are expected to talk tough on inflation ahead of their senate confirmation hearings today.
The NASDAQ closed down -2.16% and the S&P500 closed down -0.9%. Meanwhile, the DXY is up 0.2% intraday.ASIA/PACIFIC
A quiet start to the week throughout Asia, as the lunar new year is welcomed in. The Winter Olympics gets underway ahead of Friday’s opening ceremony.
The Australian dollar declines as falling stocks add to risk-off sentiment, AUDUSD is down 0.2%. The Offshore Yuan and Japanese Yen both fell 0.2% against the Dollar.ILS
USDILS has climbed up 0.45% to the 3.18 level as we print. The TA-35 pushed higher 0.4% intraday.
Israel has sold $3.15 billion dollars of bonds YTD, with issuance down 51% YoY.Data & Events
EU – ECB Policy Decision
Composite & Services PMI
Germany/France - Composite & Services PMI
UK – Composite & Services PMI
UK – BoE Policy Decision
US – Continuing & Initial Jobless claims
ISM Non-Manufacturing PMI
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