Pound reverses post-budget losses, Euro returns above parity, Biden’s approval dips ahead of midterms.
October 26, 2022
GBP/USD 1.1568 GBP/EUR 1.1533 EUR/USD 1.0031 USD/CAD 1.3545 EUR/CHF 0.9914 EUR/SEK 10.9364 EUR/NOK 10.3536 EUR/DKK 7.4383 USD/ILS 3.5179 AUD/USD 0.6472 NZD/USD 0.5805 USD/SGD 1.4087 USD/JPY 147.08 USD/CNH 7.2365 USD/INR 82.7300 EUR/ILS 3.5286 GBP/ILS 4.0695 USD/ZAR 18.0519
The pound has reversed almost all its post-budget losses. Sterling gained after the conservative leadership process ended efficiently with Rishi Sunak appointed on Monday. With the new cabinet being formed under Sunak, the political discount to GBP might be fading. Despite this the UK economy still faces several headwinds such as a looming recession and growing current account deficit. Sunak is considering a delay to next week’s planned fiscal statements.
PMIs released on Monday highlighted those recessions in the Manufacturing and Services sectors deepened through October, with activity in both industries falling to a 21-month low.EUR
The European Central Bank will likely announce an interest rate increase of 75-bps after its meeting on Thursday. The governing council is also expected to unveil a reintroduction of its liquidity tiering system. It will also discuss quantitative tightening; however the timing is unlikely to be this year.USD
Some estimates see US home prices falling roughly 15% to restore the housing market to equilibrium. Rising mortgage costs and a slowing construction industry has weighed on real estate markets.
US consumer confidence fell 5.3 points in October to 102.5, undershooting forecasts. Signs of softening demand highlight the vulnerability of the current economic expansion. Real consumer spending may have decelerated last quarter to a sluggish pace of 1.0%.
Joe Biden’s approval has dipped to 39% ahead of the US midterms recent polling shows.ASIA/PACIFIC
Australia’s Budget Update revealed that the government has been fiscally discipline. Revenue boosts from surging energy prices have been directed at fiscal repair rather than new spending.
Japan’s services PPI rose 2.1% YoY in September in line with forecasts, meanwhile South Korean manufacturers’ confidence worsened yet again.ILS
USDILS trades 10-bps lower bolstered somewhat by shekel weakness as the dollar globally trades down almost 0.60%.Data & Events
France Oct. Consumer Confidence
Eurozone M3 Money Supply
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