Investors await crucial Powell speech, UK interest rate expectations jump above 4%, Tokyo inflation accelerates to 2.6%
August 26, 2022
GBP/USD 1.1787 GBP/EUR 1.1822 EUR/USD 0.9974 USD/CAD 1.2951 EUR/CHF 0.9621 EUR/SEK 10.5766 EUR/NOK 9.6501 EUR/DKK 7.4378 USD/ILS 3.2591 AUD/USD 0.6963 NZD/USD 0.6195 USD/SGD 1.3913 USD/JPY 137.02 USD/CNH 6.8688 USD/INR 79.9213 EUR/ILS 3.2504 GBP/ILS 3.8440 USD/ZAR 16.8204
Interest rate expectations in the UK have risen by over 1% since the beginning of August. Markets now expect rates to reach 4% in May 23. This shift has been fuelled by persistent inflation and soaring energy prices.
The new PM once elected will unveil help for households within days of taking office, Chancellor Zahawi may announce plans before the conclusion of the election. The scale of such help is yet to be determined.EUR
There are fears that European governments might find managing the winter energy crisis more difficult than they are admitting. Macron has pursued a fresh supply of LNG from Algeria, the French former colony, who are the third largest exporter of LNG.
Sweden and Finland continue to hold talks with Turkey in their NATO application bids.USD
Jerome Powell’s Jackson Hole speech will be heavily scrutinised today with any deviations from expected tone likely to stir volatility into the dollar. James Bullard added his backing to further rate hikes, stating that rates should approach 4% by year-end. The FOMC will get an insight from their preferred inflation gauge briefly before Powell is set to speak, the gauge is seen rising 0.2% month on month.
China-US talks aimed at avoiding the delisting of US-listed Chinese firms made good progress yesterday.ASIA/PACIFIC
Tokyo’s CPI accelerated to 2.6%, the fastest jump since 1992. Japan is set to double defence spending over the next five years.
The US has approved a sale of military equipment of an estimated $2 billion.ILS
USDILS has traded relatively flat over the course of this week, opening and closing within 3.27 as we print. Briefly trading above 3.3 across Monday and Tuesday.Data & Events
Powell speaks at Jackson Hole
US PCE Deflator
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