Dollar slips as bets of 100-bps hike weaken, BoE under attack from PM candidates, Biden confident that Riyadh shares his urgency to boost supply.
July 18, 2022
GBP/USD 1.1939 GBP/EUR 1.1793 EUR/USD 1.0124 USD/CAD 1.2985 EUR/CHF 0.9865 EUR/SEK 10.5535 EUR/NOK 10.2617 EUR/DKK 7.4431 USD/ILS 3.4562 AUD/USD 0.6830 NZD/USD 0.6174 USD/SGD 1.3976 USD/JPY 138.14 USD/CNH 6.7507 USD/INR 79.9488 EUR/ILS 3.4989 GBP/ILS 4.1262 USD/ZAR 17.0779
The BoE drew fire from two tory leadership candidates, with Liz Truss hinting that she would change the central bank’s mandate. Candidates attacked each other over policy, with Sunak accusing Mordaunt and Truss of ‘socialism’.
GBPUSD trades higher 0.9%, following a morning of dollar weaknessEUR
The alliance backing Italian PM Draghi has broken down, signalling that both sides are ready for snap elections.
The Nord Stream 1 pipeline is set to restart Thursday, although it is unclear if it will. This could severely threaten the European economy should Germany’s gas supply remain disrupted.
Later this week the ECB is expected to raise rates for the first time in over a decade, as well as discussing a new tool to combat yield spreads within the euro-area.USD
Joe Biden has stated that Riyadh shared his “urgency” on boosting oil supply. Saudi ministers have stated that their oil policy decisions will be made on market moves and within the OPEC+ framework.
The dollar trades weaker this morning, trading -0.6% lower as traders trimmed bets of federal reserve rate hikes. Last week the implied rate hike was at 0.825%, with some exploring the possibility of a 100-bps hike. This resolve has weakened with markets consolidating around a 75-bps hike, primarily due to a report Friday showing inflation expectations had eased.ASIA/PACIFIC
NZD rose after New Zealand’s inflation rate sped up to the fastest in 32 years. Japanese markets are closed today for a holiday. The BOJ is expected to leave rates unchanged on Thursday, despite a weakening Yen.
China’s real estate output contracted 7% year on year in the second quarter worsening from a 2% drop in the three months previous. Real estate is now the biggest drag on the Chinese economy.ILS
USDILS trades -0.5% lower as we print, falling to 3.45 continuing a gradual decline from 3.5 last Thursday.Data & Events
Italy May Trade Balance
Spain May Trade Balance
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