Global stocks rally as positive earnings reports boost sentiment. Sterling loses ground as UK Politics and Brexit woes continue to apply pressure.
February 10, 2022
GBP/USD 1.3550 GBP/EUR 1.1849 EUR/USD 1.1434 USD/CAD 1.2674 EUR/CHF 1.0560 EUR/SEK 10.4719 EUR/NOK 10.0714 EUR/DKK 7.4415 USD/ILS 3.2181 AUD/USD 0.7185 NZD/USD 0.6687 USD/SGD 1.3418 USD/JPY 115.76 USD/CNH 6.3618 USD/INR 74.9775 EUR/ILS 3.6805 GBP/ILS 4.3585 USD/ZAR 15.1309
Bank of England Chief Economist Huw Pill called for a “measured” approach to rate hikes, voicing concerns about taking “unusually large policy steps”. He echoed counterparts from across the pond, confirming that a data driven approach will most likely be the key driver in decision making.
Sterling lost ground against the Dollar and Euro yesterday, as UK politics, Brexit and Central Bank rhetoric continue to add downward pressure. The FTSE is trading 0.25% higher since the London open.EUR
The European Commission launched its first post-Brexit court case yesterday against the UK, a move likely to increase tensions between London and Brussels. The British government has been referred to the European Court of Justice for breaching EU law in February 2020, regarding an order on the Romanian government.
European stocks gained as robust earnings buoyed sentiment. The Stoxx 600 advanced for a fourth day, as upbeat results from the likes of AstraZeneca, Societe Generale and Siemens spurred the rally. EURUSD lacks momentum, trading with a narrow 50pip range on the week so far.USD
The Nasdaq and S&P 500 rose yesterday as Wall Street reacted to positive earnings from the likes of Uber and Walt Disney. Treasury yields slipped ahead of today’s Inflation data and any indications of how aggressively the Fed may tighten monetary policy. The Dollar is little changed on the week so far, up less than 0.1%.
Fed members Mester and Bostic have reaffirmed all options are on the table for the size of their first interest rate increase in March. Both cited that incoming data will determine whether a 25 or 50 bp hike is appropriate, however Mester doesn’t see a “compelling case” to start with a half percentage-point increase.ASIA/PACIFIC
Bank of Japan Governor Kuroda has said that there is “no chance” the central bank will reduce easing or begin tightening policy, as the chance of Japan seeing inflationary pressures like other countries are facing is “very low”. The Japanese Yen trades at one month lows against the Dollar.
Asian stocks posted gains, with the Topix and Shanghai Composite adding 0.5% and 0.2% respectively. The Indian Rupee dropped 0.2% against the Dollar, while bonds advanced, as the central bank left the reverse repo rate unchanged.ILS
USDILS has gained 0.6% on the week so far, to reach the highest levels since October. The pair is up 0.2% intraday as investors await Januarys Consumer Confidence figures.Data & EventsUS - Core Inflation
Continuing and Initial jobless claims
UK - BoE Governor Bailey speech
Euro Area - ECB members speak
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