BoJ shocks markets by doubling a cap on 10-year yields, ECB’s Villeroy confident that Europe will avoid hard landing, Israel’s debt to GDP ratio shrank to pre-covid levels.
December 20, 2022
GBP/USD 1.2167 GBP/EUR 1.1439 EUR/USD 1.0637 USD/CAD 1.3616 EUR/CHF 0.9854 EUR/SEK 11.0510 EUR/NOK 10.4844 EUR/DKK 7.4390 USD/ILS 3.4603 AUD/USD 0.6687 NZD/USD 0.6358 USD/SGD 1.3511 USD/JPY 132.55 USD/CNH 6.9677 USD/INR 82.8036 EUR/ILS 3.6804 GBP/ILS 4.2101 USD/ZAR 17.3470
The UK has faced a difficult year in 2022. The economy has seen soaring inflation, rising rates and a bond-market meltdown. Forecasts point to a poor 2023 outlook for the UK economy. It is seen as unlikely that the UK will return to growth until Q4 next year.EUR
ECB Governing council member Villeroy has said the euro-zone economy is unlikely to experience a deep slump as interest rates are lifted to tackle soaring inflation. He said, “What I can say for certain is that France and Europe will avoid a hard landing”.USD
The lowest annual pay that US workers would be willing to accept for a new job rose to almost $73,700 in November, the highest since the it started tracking the data in 2014. Fed chair Powell described wage growth “well above what would be consistent with 2% inflation” as he switched his leading indicator to a new price gauge.
The 12-month probability of a recession spiked in November across Bloomberg economic modelling. These models see the strongest recession signal starting around September 2023.ASIA/PACIFIC
The Yen surged against the dollar following the decision from BoJ Governor Kuroda, to double the cap on 10-year yields. The Yen jumped by 3.4% against the dollar and government bonds slide following the move which paves the way for a pivot from historically loose monetary policy. The Central Bank said the move would enhance the sustainability of its monetary easing, however markets interpreted this as a move towards a tighter policy agenda.ILS
USDILS trades slightly higher intraday. Israeli’s 2022 debt-to-GDP ratio is set to shrink to pre-Covid levels of 60% from 68% last year, beating forecasts.
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