Jobs report and services hint at end to Fed tightening cycle, Earnings hint at strong spending during festive period, Core CPI to remain focus of ECB.
January 9, 2023
Rates 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.
GBP/USD 1.2154 GBP/EUR 1.1392 EUR/USD 1.0669 USD/CAD 1.3395 EUR/CHF 0.9865 EUR/SEK 11.1847 EUR/NOK 10.6073 EUR/DKK 7.4377 USD/ILS 3.5120 AUD/USD 0.6923 NZD/USD 0.6388 USD/SGD 1.3330 USD/JPY 132.41 USD/CNH 6.7928 USD/INR 82.3895 EUR/ILS 3.7467 GBP/ILS 4.2681 USD/ZAR 17.0710
The UK emerges from a Christmas period of widespread industrial action, with any respite likely temporary with unions balloting yet again. Some earnings reports suggest that the disruption and inflation did not stifle the festive spirit of British consumers, as Next and B&M saw stronger than expected reports.
The UK housing market could be set for even more volatility. More than a third of buy-to-let fixed rate mortgages are due to end in the next two years. The fallout of these expiries could spike rents across the nation, with landlords becoming increasing exposed to rising mortgage rates.EUR
Last week’s Euro-area CPI plunged last month, falling to 9.2% in December. The large drop was driven by a sharp drop in energy contributions, with energy bills substantially lowered by support measures put in place by the German government. Hidden behind the collapse in the headline figure core inflation advanced further to 5.2%, beating expectations. The ECB’s governing council is likely to take little relief from last months print, as they remain focused on developments in core inflation and underlying price pressures.USD
The stock rally following Decembers Job’s and ISM services print highlights that inflation is still driving markets in the early days of 2023. Markets homed in on the moderation in average hourly earnings from the jobs report, which they believe will allow the Fed to end its tightening cycle. Consequently, the collapse in the ISM services gauge shows that the rapid rates hike of 2022 are beginning to weigh on the economy.ASIA/PACIFIC
High-frequency data suggest that the worst of the Chinese covid surge may be over. Cases soared in China as Beijing ended its Covid-zero restrictions. The number of travellers increased significantly over Christmas, highlighting that the population is back on the move.
Guo Shuqing, PBOC party secretary, has told the press that China’s economic growth will return quickly to its normal path, as the government steps up support measures for households and private firms.ILS
USDILS continues to trade above 3.5 as it has done through much of the Christmas period. It has slipped away from highs above 3.55 seen on Friday.Data & Events
Italy Nov. Unemployment
Euro-Area Nov. Unemployment
Ireland Nov. Industrial Production.
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.
© 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.