The inflation outlook in Europe improves as key economies run ahead of forecasts. The Dollar declines as risk sentiment improves.
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February 2, 2022
GBP/USD 1.3532 GBP/EUR 1.1992 EUR/USD 1.1284 USD/CAD 1.2694 EUR/CHF 1.0400 EUR/SEK 10.4133 EUR/NOK 9.9485 EUR/DKK 7.4390 USD/ILS 3.1575 AUD/USD 0.7129 NZD/USD 0.6631 USD/SGD 1.3481 USD/JPY 114.58 USD/CNH 6.3634 USD/INR 74.8750 EUR/ILS 3.5631 GBP/ILS 4.2711 USD/ZAR 15.2826
UK retail prices rose 1.5% in January compared with the same month in 2021, the fastest pace in over 9 years. This comes a day before the BoE is widely expected to hike interest rates for the second time.
PM Johnson said he will publish the full investigation into No10. Parties, to escape the gravity of controversy on Downing Street. The government illustrated their vision to “level up” parts of the country, by decentralizing civil service departments.
British factory output grew for a 20th consecutive month on the back of yesterday’s PMI release, which printed above forecasts at 57.3.
The FTSE100 closed 70 points higher yesterday, whilst Sterling posts gains against the dollar and euro this morning.EUR
Tensions over Ukraine continue to threaten stability on the continent. Russia is alleged to be moving another 30,000 troops to the border. This comes as several European and World leaders have shown solidarity with Ukraine offering military and civilian aid.
Euro Area unemployment beat expectations yesterday, while manufacturing PMIs narrowly missed out, despite improving on December’s release.
Equities have pushed higher across the bloc as inflation data from France, like Germany and Spain, ran ahead of forecasts. The STOXX 600 and DAX closed 1.3% and 1% higher respectively. Core Inflation data is due to be released from the Euro Area this morning, a key focus for investors ahead of tomorrow’s ECB rate decision.USD
ADP employment change is estimated to print just above 200k today, compared to over 800k the previous month. The data will be closely watched as an early signal ahead of US Non-Farm payrolls due to be released on Friday.
US manufacturing PMIs fell slightly below the previous month’s levels, although narrowly beat expectations. Construction spending failed to meet forecasts of 0.6% to print at 0.2%.
The DXY extended losses for the third consecutive session yesterday as improved risk-sentiment dampened demand for the greenback. The Dollar is trading 0.12% lower against the Euro and Sterling this morning.ASIA/PACIFIC
Asian stocks rose on the back of positive US earnings outlooks, and a Fed that appears to be taking a measured approach to tightening policy. The MSCI Pacific is up 0.9%, and the ASX200 1.17% after the Asian session, with many markets remaining shut for the Lunar New Year.
Sino-Japanese tensions flare, after Japan’s parliament passes a motion on Uyghur human rights, just days before the Winter Olympics commence.ILS
USDILS continues it trajectory towards the 3.16 level as we print, up 0.22% at time of writing. The pair is trading 1.25% lower since Monday.
The Bank of Israel sold 12 billion shekels of 371-day Makam bills with a yield of 0.07%.Data & Events
OPEC decides on production policy and output limits
Euro Area – Jan CPI
US – ADP Employment Change
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