Tighter monetary policy weighs on US small-business sentiment, lower gas prices may provide relief for UK government.
January 11, 2023
GBP/USD 1.2136 GBP/EUR 1.1298 EUR/USD 1.0742 USD/CAD 1.3422 EUR/CHF 0.9915 EUR/SEK 11.2352 EUR/NOK 10.7288 EUR/DKK 7.4382 USD/ILS 3.4587 AUD/USD 0.6910 NZD/USD 0.6364 USD/SGD 1.3314 USD/JPY 132.44 USD/CNH 6.7812 USD/INR 81.6271 EUR/ILS 3.7152 GBP/ILS 4.1973 USD/ZAR 16.9796
The decline in natural gas prices over recent weeks may present a rare upside risk for the UK economy. If gas prices remain at current levels the government will likely be able to avert the planned increase on the household energy bill cap. This would likely ease the energy component of inflation and make for a shallower recession in the near term. GBPUSD trades 0.15% lower intraday.EUR
ECB member Villeroy has said that the central bank needs to be pragmatic as it raises interest rates in the coming months to tame inflation toward 2% by the summer.
Despite Euro-zone inflation remaining near a historic high, the consumer expectations for the path of prices have largely receded to their long-term norm.USD
The Federal Reserves rapid tightening is beginning to weigh on sentiment. The NFIB Small Business Optimism Index declined 2.1 points in December. Along with the ISM services and manufacturing gauges this signals a material shift in the economic climate, brought on by the higher rate environment.ASIA/PACIFIC
Australia’s CPI rose 7.3% in November advancing from 6.9% in October. The gain was driven by an increase in the price of motor fuel. Core CPI printed higher than the consensus highlighting a global issue of stickier core demand.ILS
USDILS slipped further during yesterday’s session, which saw highs of 3.4870, but failed to hold gains moving into Wednesday.Data & Events
ECB Villeroy speaks
Portugal Dec. CPI
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