Moscow approaches China for Aid; Renewed calls for no-fly zone; Parts of Asia face Covid resurgence; Russian debt default ‘imminent’.
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FX Rates
March 14, 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 1.3039 GBP/EUR 1.1893 EUR/USD 1.0964 USD/CAD 1.2757 EUR/CHF 1.0255 EUR/SEK 10.5706 EUR/NOK 9.8424 EUR/DKK 7.4394 USD/ILS 3.2616 AUD/USD 0.7248 NZD/USD 0.6799 USD/SGD 1.3646 USD/JPY 118.03 USD/CNH 6.3795 USD/INR 76.5434 EUR/ILS 3.5760 GBP/ILS 4.2529 USD/ZAR 15.0593
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GBP
Investor focus for the week shifts to Thursday’s Bank of England rate decision, where the market is expecting a 25bps rise. Four successive 0.25% rate hikes are expected during the year.
The ongoing Russia/Ukraine conflict risks a second spike in UK inflation in the Autumn. According to the Resolution Foundation, price growth could hit 8%, and have a particularly hard impact on poorer households. Furthermore, UK households face a £38 billion hit in energy costs, the equivalent of a 6% jump in income tax.
EURGBP has rallied this morning, up 0.47% as we print.
EURECB’s Villeroy has commented that a cautious approach to the easing of monetary policy and budgetary tightening from member states is needed, as the length and impact of the oil crisis remains unknown.
The war in Ukraine is having major adverse effects on EU economies, with Germany in particular facing pressure to offer aid to energy firms. Furthermore, In France the central bank has stated its challenges in forecasting inflation and growth given the uncertainty caused from the conflict.
EURUSD trades 0.49% higher.
USDThe US has warned of implications if China offers support to Russia, as part of a wider warning of punitive measures should any country aid Russia in circumventing sanctions. The US still opposes a no-fly zone, according to US National Security advisor Jake Sullivan.
The Fed is widely expected to begin tightening this week, with an initial hike of 0.25% currently priced in, the market expects up to 6 hikes throughout 2022.
Treasuries have fallen with the 5-year yield rising above 2% for the first time since May 2019. The DXY trades down by 0.23% as we print. US futures are up 0.5% on average.
ASIA/PACIFICAsian shares fluctuated following a sell-off in Chinese tech equities. The fears of widespread regional lockdowns have stoked fear into Chinese markets, with investors waiting to see whether the PBOC will cut rates again this year.
It is hoped the US and China will strike a deal to solve the audit dispute threatening to delist Chinese firms from US exchanges.
New Zealand is set to reduce fuel tax to mitigate rising prices, with public transport fares halved to encourage reduced fuel consumption. Australia’s budget this year will also focus on helping struggling households and combating rising prices.
ILSUSDILS trades 0.01% lower this morning, following a volatile Asian session with the pair seeing highs of 3.263 and lows of 3.2550.
Data & EventsFR – Trade Balance
US – Sells 13-week and 26-week bills
BP launches annual energy outlook
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