Biden claims there is still ‘room for diplomacy’ in Ukraine crisis, despite tensions easing. UK inflation rises to 5.5%, the highest rate since 1992.
February 16, 2022
GBP/USD 1.3560 GBP/EUR 1.1917 EUR/USD 1.1378 USD/CAD 1.2693 EUR/CHF 1.0526 EUR/SEK 10.5459 EUR/NOK 10.1245 EUR/DKK 7.4424 USD/ILS 3.1974 AUD/USD 0.7173 NZD/USD 0.6649 USD/SGD 1.3440 USD/JPY 115.71 USD/CNH 6.3353 USD/INR 75.0250 EUR/ILS 3.6390 GBP/ILS 4.3369 USD/ZAR 15.0702
UK inflation reached the highest levels since 1992, rising above forecasts (5.4%), to print at 5.5% annually through to January. Since rising above the BOE’s 2% target eight months ago, inflation has exceeded market expectations seven times, with this reading likely to bolster expectations of consecutive 25 basis point rate hikes throughout the first half of 2022.
The FTSE closed yesterday up 1.03% correlating with a boost to European equities following easing of Russia-Ukraine tensions. Sterling trades 0.2% higher against the US Dollar as we print.EUR
The Eurozone’s monthly trade balance was hit by a 53% year-on-year rise in imports from China, with imports rising 36.7% in December. Eurozone GDP rose 1.4% in Q4 2021.
European equities were bolstered by a withdrawal of some troops from the Ukrainian border by Putin. This comes as a reversal in the trend of failed diplomatic excursions by European leaders. EURUSD has capitalized on the improving market mood, testing the 1.1400 level amid the de-escalation of conflict.USD
FOMC minutes from the January meeting will be released today, with investors eager to understand the feds inflation outlook and the causation behind Jerome Powell’s hawkish shift.
The financial stability board have raised concerns that imposing potential sanctions on Russia, may risk undermining global security and disrupt payment flows. This comes as Biden stated there is still room for diplomacy to succeed in easing tensions.
US equity futures trade down this morning with NASDAQ and S&P500 -0.3% and -0.22% lower as tensions ease in Europe.ASIA/PACIFIC
South Korea added 1.14 million jobs in January from the year before, while the jobless rate fell 0.2% in December.
The Bank of Japan will likely raise the ceiling on is 10-year yield target from 0.25% to 1%. It will be forced to shift its yield curve policy to compete with rising interest rates in the west.ILS
USDILS trades down -0.32% intraday, falling to just below the 3.2000 level at time of writing. The pair reached 6-month highs during yesterday’s session, briefly trading above 3.2650.
Israel’s Q4 GDP figures are released today at 12pm CET. The TA-35 is rising for the third successive day up 0.8% in early trading.Data & Events
UK – Jan CPI
Israel – Q4 GDP
US – Jan Industrial production
US – FOMC minutes from Jan meeting
NATO defense ministers meet
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