Certainty over extent of tightening dissipates from Fed and ECB, Covid restrictions now weigh on 20% of China’s economy.
November 22, 2022
GBP/USD 1.1831 GBP/EUR 1.1525 EUR/USD 1.0267 USD/CAD 1.3416 EUR/CHF 0.9827 EUR/SEK 10.9692 EUR/NOK 10.4926 EUR/DKK 7.4379 USD/ILS 3.4806 AUD/USD 0.6630 NZD/USD 0.6133 USD/SGD 1.3800 USD/JPY 141.58 USD/CNH 7.1439 USD/INR 81.6963 EUR/ILS 3.5734 GBP/ILS 4.1183 USD/ZAR 17.3276
The 1.5% leap in the two-year swap curve reference rate for mortgages that was seen during Liz Truss’ short stay in downing street, has been fully reversed, relieving much of the considerable pain in the mortgage rates. Higher mortgage rates will likely disproportionately affect younger generations, exacerbating the painful wealth and ownership divide.
Over the weekend, a story stating that Sunak’s government were pursuing a closer “Swiss-style relationship” with the European Union.EUR
As the Fed begins to tilt towards downshifting, a similar shift of opinion is occurring within the ECB’s governing council. On Monday alone, we have heard an assortment of voices, both arguing for and against a continuation of the jumbo hikes seen since September.USD
Federal Reserve officials have broadly maintained their steadfast stance to fight against inflation. However, SF President Mary Daly also said that officials need to be mindful of the lags in the transmission of policy changes. Meanwhile, her Cleveland counterpart Loretta Mester said she’s open to slowing the tempo of rate hikes.
Ahead of this week’s thanksgiving holiday in the US, the FOMC minutes (Wednesday) are likely to dictate the dollar’s strength this week. As the argument for further tightening becomes increasingly convoluted, the minutes will be scoured to reveal the lay of the land.ASIA/PACIFIC
Covid control restrictions now weigh on nearly one-fifth of China’s economic output. There were 27,037 new cases yesterday.
South Korea’s household debt rose 1.4% last quarter from a year earlier, the slowest pace on record. Confidence fell to 86.5 for November from 88.8 last month.ILS
USDILS trades 0.2% higher today above 3.47 through today.Data & Events
Hungary Rate Decision
Euro-area Nov. Consumer Confidence
Trading in financial instruments may involve a high degree of risk and may not be suitable for all investors. Trading in financial instruments can result in both loss and profit. Investors should carefully consider whether financial instruments suit their needs, financial resources and personal circumstances.
The information contained in this material is solely for informational purposes only and it is not and should not be construed as an offer or a solicitation of an offer to buy or sell any financial instruments and cannot be relied upon as a representation that any particular transaction necessarily could have been or can be effected at the stated prices. This material does not contrue advice.
For more analysis on FX markets or information regarding SVB's FX services:
0800 023 1440 from within the UK
+44 207 367 7880 from overseas
See all of SVB's latest FX information and commentary.
© 2022 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB).
Silicon Valley Bank is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. FC029579. Silicon Valley Bank is authorised and regulated by the California Department of Business Oversight and the United States Federal Reserve Bank; authorised by the Prudential Regulation Authority with number 577295; and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. Silicon Valley Bank is a subsidiary of SVB Financial Group, a Delaware corporation and is an affiliate of SVB Financial Group UK Limited. SVB Financial Group UK Ltd is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. 5572575 and is authorised and regulated by the Financial Conduct Authority, with reference number 446159. SVB Financial Group and its subsidiary Silicon Valley Bank are members of the Federal Reserve System and Silicon Valley Bank is a member of the FDIC.
Your eligible deposits with Silicon Valley Bank UK are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme. Any deposits you hold above the limit are unlikely to be covered. Please click here for further information or visit http://www.fscs.org.uk. For more detailed information about coverage and limits, please review our FSCS Information Sheet at http://www.fscs.org.uk.
This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources. Opinions expressed are our opinions as of the date of this content only. The material is based upon information which we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such.