Hunt repeals Truss’ mini-budget, Growth remains top priority for Xi Jinping, ECB seen ending its tightening cycle in February 2023.
-
FX Rates
October 18, 2022Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.
Source: BloombergGBP/USD 1.1351 GBP/EUR 1.1514 EUR/USD 0.9859 USD/CAD 1.3707 EUR/CHF 0.9794 EUR/SEK 10.9288 EUR/NOK 10.3706 EUR/DKK 7.4385 USD/ILS 3.5185 AUD/USD 0.6310 NZD/USD 0.5695 USD/SGD 1.4182 USD/JPY 148.98 USD/CNH 7.1972 USD/INR 82.2550 EUR/ILS 3.4688 GBP/ILS 3.9938 USD/ZAR 17.9782
-
GBP
Jeremy Hunt used his newly acquired role as chancellor to roll back almost all the governments ill-fated mini budget, however some lasting damage may have been done with a premium on the two-year swap rate, used to price a substantial portion of mortgages. Crucially, the average two- and five-year fixed mortgages remain above 6%.
The significant fiscal U-turn by the government could save $32 billion, with Hunt warning that further spending cuts will be needed in the weeks ahead.
EURThe ECB’s governing council is expected to debate the timing of quantitative tightening at its next meeting on October 27. ECB president Lagarde will likely reiterate at the press conference that the process will begin after interest rate normalisation has been completed. Current forecast sees the central bank ending its tightening cycle in February 2023, before bringing interest rates back to neutral territory.
Following on from the UK’s turmoil in September, fears are growing of the impact of surging borrowing costs in the post-covid energy crisis could trigger a fresh debt crisis. France and Italy are among some European nations which could see unsustainable debt trajectories unless they make painful fiscal policy changes.
Olaf Scholz extended the life of Germany’s three remaining nuclear plants to mid-April reversing previous decisions by his energy minister.
USDJoe Biden continues to downplay the chances of a recession, despite many macro-economic models suggesting otherwise. Biden did concede that any recession would be ‘very slight’, however markets have been expected that the hawkish and rapid tightening cycle that the Fed has committed to will weigh significantly on growth.
US industrial production is expected to remain largely unchanged through September eking out small gains of 0.1%. Meanwhile, homebuilder sentiment is expected to fall through October to 43 from 46 the month prior.
ASIA/PACIFICThe key takeaway from China’s party congress is that growth remains the top economic priority, however there is a strong tone focused on economic self-reliance and a technology independence which reflects the building trade tensions with the US. The speech also praised China’s covid zero stance, despite its ability to hinder China’s economic activity.
ILSDespite a worsening environment for technology focused companies, the TA-35 see technology emerging as the No. 1 industry making up almost 25% of the market. USDILS trades flat intraday.
Data & EventsGermany ZEW Survey
ECB Makhlouf and Schnabel speak
Risk Statement
Trading in financial instruments may involve a high degree of risk and may not be suitable for all investors. Trading in financial instruments can result in both loss and profit. Investors should carefully consider whether financial instruments suit their needs, financial resources and personal circumstances.
The information contained in this material is solely for informational purposes only and it is not and should not be construed as an offer or a solicitation of an offer to buy or sell any financial instruments and cannot be relied upon as a representation that any particular transaction necessarily could have been or can be effected at the stated prices. This material does not contrue advice.
For more analysis on FX markets or information regarding SVB's FX services:
0800 023 1440 from within the UK
+44 207 367 7880 from overseas
See all of SVB's latest FX information and commentary.
Source: Bloomberg | |
© 2023 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). Silicon Valley Bank is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. FC029579. Silicon Valley Bank is authorised and regulated by the California Department of Business Oversight and the United States Federal Reserve Bank; authorised by the Prudential Regulation Authority with number 577295; and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. Silicon Valley Bank is a subsidiary of SVB Financial Group, a Delaware corporation and is an affiliate of SVB Financial Group UK Limited. SVB Financial Group UK Ltd is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. 5572575 and is authorised and regulated by the Financial Conduct Authority, with reference number 446159. SVB Financial Group and its subsidiary Silicon Valley Bank are members of the Federal Reserve System and Silicon Valley Bank is a member of the FDIC. Your eligible deposits with Silicon Valley Bank UK are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme. Any deposits you hold above the limit are unlikely to be covered. Please click here for further information or visit http://www.fscs.org.uk. For more detailed information about coverage and limits, please review our FSCS Information Sheet at http://www.fscs.org.uk. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction. Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources. Opinions expressed are our opinions as of the date of this content only. The material is based upon information which we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. |