BoE warns UK to enter recession; US labour market expected to remain strong; Rupee gains following RBI rate hike.
August 5, 2022
GBP/USD 1.2159 GBP/EUR 1.1885 EUR/USD 1.0231 USD/CAD 1.2872 EUR/CHF 0.9786 EUR/SEK 10.3675 EUR/NOK 9.9678 EUR/DKK 7.4412 USD/ILS 3.3304 AUD/USD 0.6966 NZD/USD 0.6299 USD/SGD 1.3760 USD/JPY 133.29 USD/CNH 6.7520 USD/INR 79.2300 EUR/ILS 3.4072 GBP/ILS 4.0495 USD/ZAR 16.5611
BoE raised rates at the fastest place in 27 years. The bank also warned that the UK economy will enter recession later this year. Real household income is projected to fall sharply in 2022 and 2023, whilst consumption growth turns negative. Yesterday’s gloomy outlook caused a quick GBP selloff, however sterling gradually recovered throughout the day.
Liz Truss vowed to avert recession with tax cuts, Sunak disputed this stating that Truss’ policies would stoke inflation. In a show of hands by the audience, Sunak won last night’s Sky News debate.EUR
German industrial production rose 0.4% month on month through June, unexpectedly gaining despite a 0.1% drop in May. French industrial production beat the consensus gaining 1.4%, despite an expected -0.3% fall.
The EUR has slipped slightly against the dollar, trading down -0.15%.USD
Despite signs the US labour market is cooling, today’s non-farm payrolls are expected to show hiring is holding up. The market expects the economy to have added 250,000 jobs in July.
Cleveland Fed chief Mester, has said the economy is not in a recession, and that it wouldn’t be unreasonable to raise rates above 4%.ASIA/PACIFIC
The rupee gained against the dollar, after the RBI hike rates by 50-bps to 5.4% to combat broad-based inflation. USDINR trades -0.4% as we print.
Japan’s household spending jumped 3.5% YoY in June, more than expected. Chinese militaries were seen crossing the median line of the Taiwan Strait this morning.ILS
USDILS trades marginally higher as we print, up 0.1% intraday.Data & Events
US Non-farm Payrolls
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