Fed likely to hike by 0.75% once again, Powell may signal downshift for December. UK shop inflation reaches highest rate since 2005. Exit polls suggest Netanyahu to return as Israeli PM.
November 2, 2022
GBP/USD 1.1514 GBP/EUR 1.1628 EUR/USD 0.9903 USD/CAD 1.3595 EUR/CHF 0.9880 EUR/SEK 10.8853 EUR/NOK 10.2257 EUR/DKK 7.4441 USD/ILS 3.5336 AUD/USD 0.6423 NZD/USD 0.5876 USD/SGD 1.4112 USD/JPY 147.13 USD/CNH 7.2896 USD/INR 82.7675 EUR/ILS 3.4992 GBP/ILS 4.0686 USD/ZAR 18.1200
Prices in British shops rose by the highest rate since 2005 through October as the cost-of-living crisis piles pressure on consumers. The British Retail Consortium said shop price inflation accelerated to 6.6%. Food price increases hit 11.6%, another record.
The UK’s fiscal U-turn doesn’t solve all of GBPs economic uncertainty. However, the pound's strength since Hunt's appointment as chancellor combined with a softer dollar, may have eased fears of GBPUSD parity.EUR
Governing council members, Nagel and De Cos have stated that the ECB will have to go further on rates. They stressed that inflation is proving to be persistent, and should the ECB want to overcome it, monetary policy would need to be tougher and tighter. Last week the ECB doubled its deposit rate to 1.5% and indicated it would lift borrowing costs again, despite the strain this could put on the bloc’s most indebted members.
Today sees Manufacturing PMIs from across the euro-zone, which will highlight the performance of industry as Europe heads towards a winter full of recession fears.USD
Several high-frequency indicators show that despite rate hikes weighing on the US economy, they are yet to threaten the outlook of positive growth through the final quarter. Consumer-spending remains in line with expectations which sees a period of sub-2% growth ahead, meanwhile the labour market remains robust with initial jobless claims remaining around historic lows.
A 0.75% rate increase is widely expected today. The markets will focus its attention on the tone of Jerome Powell, to determine whether the FOMC are signalling a downshift in the pace of rate hikes. It is expected that he may present a 0.5% hike as the base case for December.ASIA/PACIFIC
Singapore can absorb record inflows of new money, its central bank chief said, allaying concerns of a real estate bubble as rents and prices surge to unprecedented highs.
Slumping mortgage approvals point to a deeper downturn for Australia’s housing market. Higher interest rates have caused new approvals to plunge by almost 25% since the start of 2022.ILS
Exit polls suggest that Former Israeli PM Benjamin Netanyahu is on course for victory in the general election. The projections give his right-wing bloc a slim majority of seats over his centre-left opponents led by current PM Yair Lapid.Data & Events
US Fed Rate Decision
US Oct. ADP report
Euro-Area Manufacturing PMIs
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