Euro-Sterling hits 5-year low; Euro-area banks worst-hit from war; DXY continues into yearly highs; Conservatives accused of using Moscow-linked money.
March 4, 2022
GBP/USD 1.3301 GBP/EUR 1.2076 EUR/USD 1.1014 USD/CAD 1.2729 EUR/CHF 1.0117 EUR/SEK 10.7937 EUR/NOK 9.8485 EUR/DKK 7.4393 USD/ILS 3.2512 AUD/USD 0.7350 NZD/USD 0.6829 USD/SGD 1.3597 USD/JPY 115.41 USD/CNH 6.3188 USD/INR 76.1620 EUR/ILS 3.5809 GBP/ILS 4.3244 USD/ZAR 15.3641
EURGBP fell to a 5-Year low of 0.8260 intraday, as the pound sees renewed strength.
Boris Johnson has come under pressure to act following claims that £2 million of Moscow-linked donations have been raised in fundraising campaigns. The government has also been critiqued by the Lords over a lack of a ‘credible plan’ for net zero transition.
The pound trades down 0.5% against the dollar, and up 0.2% against the euro.EUR
Emmanuel Macron finally announced what seemed to be inevitable that he will run for re-election. He is clear favourite to win both rounds in April’s election cycle.
Euro-area banks have been the worst-hit sector since the Russo-Ukraine conflict started, as dividend futures are dumped by investors. Since 10th February, Euro STOXX banks are down -24% and 2024 dividend futures have plummeted -30%.
EU gas dependency sits at 40% says the bloc’s energy chief, as the bloc prepares measures in case Russia withholds all had exports.
EURUSD is trending towards 4 year-lows, down almost 11% since highs last year, as the ECB’s divergence from Fed policy adds to euro weakness.USD
US labour data is expected today - market expectations is that nonfarm payrolls are expected to rise by 423,000, whilst unemployment is seen dipping 0.1% to 3.9%. These releases are expected to bolster the Fed’s dual mandate and underpin Fed opinion that the labour market can endure policy tightening.
The spread between two-year and five-year treasury yields is small, adding to fears that any unexpected shock could cause an inversion.
The DXY continues climbing into yearly highs, recent geopolitical tensions have increased dollar gains as the DXY trades up 0.32% intraday.ASIA/PACIFIC
The financial isolation enforced on Russia should warn Xi Jinping of the economic implications of confrontation. This may lead Beijing to pursue financial independence from the US and to develop alternative to the mainstream financial structure. Jerome Powell has warned that the Ukraine war could encourage Chinese politicians to develop alternatives to the dollar dominated international payment systems.
South Korea’s inflation unexpectedly accelerated in February to 3.7%, a trend which is also seen in Thailand - this comes as the country battles a record covid wave.
The Nikkei, and Hang Seng finished down -2.23% and -2.5%, and the CSI closed down -1.2%.ILS
USDILS trades up 0.1% as we print, at 3.254 continuing a gradual climb of 0.75% over the last 3 days.
The Bank of Israel has warned that a digital shekel would harm profitability but would not destabilise the banking system.Data & Events
NATO Foreign Ministers meeting
IT – Q4 GDP
US – Non-farm payrolls
IAEA holds briefing on Ukraine power-plant.
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