Bond markets see Fed policy rate peaking at 3.5%, UK could face blackouts through winter, European rivers fall to impassable levels hindering trade.
August 10, 2022
GBP/USD 1.2086 GBP/EUR 1.1836 EUR/USD 1.0211 USD/CAD 1.2880 EUR/CHF 0.9716 EUR/SEK 10.3847 EUR/NOK 9.9166 EUR/DKK 7.4411 USD/ILS 3.3150 AUD/USD 0.6964 NZD/USD 0.6292 USD/SGD 1.3780 USD/JPY 134.97 USD/CNH 6.7628 USD/INR 79.4638 EUR/ILS 3.3848 GBP/ILS 4.0063 USD/ZAR 16.5685
It is estimated by the IFS that UK government departments required £44 billion if they are to offset the impact of rising prices. Meanwhile, households are a record £1.3 billion in debt to their energy suppliers ahead of winter. The UK could face blackouts through winter due to its energy dependence on pipelines from the continent in cold weather.
Both Truss and Sunak plan to take on the BoE as part of their initial policy. They aim to give ministers powers to override city regulators.EUR
Water levels in the Rhine have fallen to the point of the river becoming impassable, hindering vast flows of diesel and coal. The Danube is also low hampering grain and other trade.
France’s economic output is stabilising as a continued expansion in the services sector compensates for weaker activity in construction and industry.USD
James Bullard has said the Fed is prepared to raised interest rates further should inflation continue to surprise to the upside. The two-year treasury yield exceeded the 10-year by nearly 50-bps yesterday, as markets price the peak of the Fed’s tightening cycle at 3.5%
Some are skeptical of the Inflation Reduction Act, stating that it will have almost no effect on price growth.ASIA/PACIFIC
The Bank of Thailand is expected to raise its policy rate by 25 bps to 0.75% today, its first hike in more than three years.
Nearly three dozen people have been made ill by a new virus from the same family as the deadly Nipah and Hendra viruses. There is no evidence so far that person-to-person transmission is possible.ILS
USDILS trades 0.05% higher below 3.32. Voting has begun in the Likud Primaries.Data & Events
Italy July CPI
EIA US Oil report
BoE’s Pill speaks.
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