Kwarteng shifts gilt volatility responsibility onto Bank of England, Germany inflation stabilises through September, Biden concedes risk of ‘slight recession’.
October 13, 2022
GBP/USD 1.1092 GBP/EUR 1.1429 EUR/USD 0.9706 USD/CAD 1.3815 EUR/CHF 0.9698 EUR/SEK 11.0269 EUR/NOK 10.4344 EUR/DKK 7.4395 USD/ILS 3.5772 AUD/USD 0.6279 NZD/USD 0.5611 USD/SGD 1.4351 USD/JPY 146.83 USD/CNH 7.1929 USD/INR 82.3838 EUR/ILS 3.4721 GBP/ILS 3.9679 USD/ZAR 18.3459
Kwasi Kwarteng has said the Bank of England will be responsible if UK markets suffer renewed volatility after its bond-buying program ends on Friday. The Government appear to be pushing responsibility for gilt markets onto central bankers ahead of next week which will sees the BoE withdraw support, ending its bond-buying program. UK markets could see higher volatility if pensions funds have not unwound positions and raised the required cash to remain liquid.EUR
German CPI Stabilised through September at 10%, a relief ahead of a winter filled with much uncertainty over energy. Germany is set to begin a large energy focused fiscal plan, aiming to reduce the impact of the winter on Germany businesses and households. This has raised concern amongst EU members over creating an economic imbalance within the bloc.
Swedish inflation hit a 31-year high as a weak SEK has led to higher prices on imported goods. The CPIF measure tracked by the Swedish Central Bank rose 9.7% YoY through September, the highest since June 1991.USD
Joe Biden conceded the risk of a ‘very slight’ recession, stressing that even a mild downturn could prove stressful for many American households. Biden has frequently dismissed speculation of a US recession, something which the Fed has hinted to on several occasions. Some forecasts see the US slipping into contractionary territory in the second half of 2023.
Markets currently anticipate that today’s US CPI print will do little to affect the consensus that the Fed will hike 75-bps in November. A higher-than-expected CPI print could dissuade the Fed from downshifting to a 50-bps in December. US PPI slowed slightly to 8.5%, from 8.7% yesterday.ASIA/PACIFIC
Some local governments across China are buying homes in bulk from developers or encouraging state-owned entities to do so, in renewed efforts to prop-up the real estate market. It is unknown whether this is a directive from central government but follows a cut in mortgage rates and other measures intended to stimulate demand in the slumping property market.
Against the backdrop of a weakening economic outlook, and growth falling behind that of many of its Asian counterparts, China is set to open its 20th Communist party congress on Sunday, with Xi Jinping set to secure a third term as party chief.ILS
Living costs are polling as the top priority for voters, outweighing issues such as the conflict with Palestine. USDILS trades 0.4% higher intraday.Data & Events
US Weekly Jobless Claims
Germany Current Account Balance
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