Risk of US default as soon as July, Scotland’s First minister resigns in shake-up of UK political landscape, Israeli inflation unexpectedly gains in January.
February 16, 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 1.2048 GBP/EUR 1.1265 EUR/USD 1.0695 USD/CAD 1.3380 EUR/CHF 0.9869 EUR/SEK 11.1390 EUR/NOK 10.8948 EUR/DKK 7.4515 USD/ILS 3.5311 AUD/USD 0.6920 NZD/USD 0.6295 USD/SGD 1.3345 USD/JPY 133.89 USD/CNH 6.8667 USD/INR 82.6950 EUR/ILS 3.7761 GBP/ILS 4.2541 USD/ZAR 18.0472
Sterling dropped yesterday, reaching lows of 1.1990 before recovering to sit in the 1.2060 region as we print. the downturn begun with UK CPI numbers printing more than 5x the BOE target, however strong US retail sales further weighed on the pair into the afternoon. GBPUSD now sits flat on the start of the week. GBPEUR showed steeper declines, sitting down 0.42% this week in the 1.1250 region.
Scotland's first minister, Nicola Sturgeon has stepped down from her role following a wave of political issues over the previous few weeks. With with no clear heir, a number of MPs are in the running for the top job: John Swinney, Kate Forbes and Angus Robertson are to name a few.
British Gas owner Centrica has become the latest energy provider to post huge profits following the soaring energy prices in 2022. Centrica's full year profit's hit 3.2billion, more than 3 times 2021 numbers.EUR
Whilst the Italian economy is one of the most precariously positions in the Euro-Area, there is significant upside risk in 2023 as GDP growth came in higher than expected in the second and third quarter. Looking into next year, the €72 billion government stimulus aimed at protecting households and businesses could boost GDP expectations. Despite this, the consensus is for Italy to slide into recession, whilst the biggest risk is that ECB tightening lifts government bond yields, and Italy gets drawn into a sovereign debt crisis.
EURUSD trades roughly flat over the last 24 hours. European equities have opened higher across the board.USD
A non-partisan congressional budget office has warned that the US government could be at risk of default come July. Since hitting the statutory debt ceiling last month, the Treasury department have been using accounting manoeuvres to make good on the government’s fiscal obligations. Treasury secretary Janet Yellen has warned that if congress did not act, there could be an “economic and financial catastrophe”.
US retail sales rebounded sharply with January seeing a 3% rise, following two consecutive months of declines. This highlights the underlying strength in the US economy. As the robust labour market continues, this confidence in employment is translating into high spending from consumers. This signal of economic strength injected a degree of uncertainty into stocks yesterday, as markets feared that a stream of positive economic data, could raise the Fed’s terminal rate higher.
Overall, the dollar trades 0.4% higher than this time yesterday. Meanwhile, US equities generally finished higher, with the NASDAQ up 0.92%.ASIA/PACIFIC
The Philippines central bank has reinforced its commitment to anchoring the peso, and inflation expectations by delivering another 0.5% hike. It signalled another 0.5% hike coming at its March 23rd. However, current forecast sees tightening peaking after the March meeting.
Bank Indonesia signalled the end of its tightening, alongside its first rate-hold of the cycle. The central bank’s latest play is to wait and see if tighter monetary policy begins to weigh on inflation in the second half of 2023.ILS
Israel’s inflation unexpectedly quickened in January, extending a 15-year high reached in late 2022. Consumer prices climbed an annual 5.4% last month, compared with 5.3% in December, surpassing the expected 5.2%. The most substantial contributors were the cost of electricity, tobacco products as well as housing services.Data & Events
US Jan Housing Starts
US Jobless Claims
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