Equities slip amid fears may be committed to tighter policy, UK Short-term inflation expectations jump, Germany could rely on nuclear to fill gas shortfall
August 22, 2022
GBP/USD 1.1806 GBP/EUR 1.1789 EUR/USD 1.0014 USD/CAD 1.3005 EUR/CHF 0.9609 EUR/SEK 10.6440 EUR/NOK 9.8304 EUR/DKK 7.4375 USD/ILS 3.2760 AUD/USD 0.6893 NZD/USD 0.6192 USD/SGD 1.3945 USD/JPY 136.94 USD/CNH 6.8478 USD/INR 79.8838 EUR/ILS 3.2804 GBP/ILS 3.8665 USD/ZAR 17.0649
UK short-term inflation expectations jumped following news of double-digit price gains. One-year RPI swaps surged more than 3.5% to a record high of 11.6%. This is set to complicate the policy agenda for the Bank of England, who are treading a narrow path between surging inflation and weak economic growth. Any softening of policy from the Bank of England could further add to sterling’s downside.
GBPUSD now trades at 1.18 following months of weakening economic signals.EUR
Germany may reply on nuclear power to fill the shortfall in their energy grid caused by an expected shortage of Russian natural gas imports this winter.
EURUSD trades -0.3% lower as we print, the EURO Stoxx has opened 1% lower.USD
Equities and contracts globally have slipped amid fears the Fed could be doggedly committed to tighter monetary policy.
The US and South Korea have begun large military drills, including wargaming against an invasion of North Korea.ASIA/PACIFIC
Chinese banks lowered their benchmark loan prime rates for the first time in months, as Beijing looks to stimulate borrowing demand.
Pakistan’s central bank could hike its key rate by 75-bps to 15.75% to stop inflation.ILS
The bank of Israel is expected to extend its tightening to its longest since 2008, as it responds to the highest inflation in over a decade. It is expected that the BOI will raise rates by 50 bps today, raising the key rate to 1.75%.Data & Events
No Major Economic releases.
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