Stock’s retreat as US rate expectations rise, Sunak has surprise visit to Northern Ireland as hopes rise on EU-UK deal.
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FX Rates
February 17, 2023Rates 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 1.1929 GBP/EUR 1.1209 EUR/USD 1.0642 USD/CAD 1.3518 EUR/CHF 0.9902 EUR/SEK 11.2103 EUR/NOK 10.9958 EUR/DKK 7.4457 USD/ILS 3.5683 AUD/USD 0.6827 NZD/USD 0.6206 USD/SGD 1.3399 USD/JPY 134.91 USD/CNH 6.8934 USD/INR 82.8369 EUR/ILS 3.7974 GBP/ILS 4.2568 USD/ZAR 18.2907
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GBP
Rishi Sunak faces backlash from Eurosceptics after his surprise visit to Belfast to rally support from the Northern Irish parties for a deal in Brussels. Sunak's attempts to resolve a two-year dispute over the trade region has come under scrutiny with some warning he is going too far to accommodate the EU.
UK retail sales rise unexpectedly following January discounting. The volume of goods sold rose 0.5% in January, after a 1.2% decline in December - this was higher than the 0.3% rise expected. This data suggest that consumers are managing the cost-of-living crisis better than anticipated. ONS figures show however that sales are still 1.4% below pre-pandemic levels.
BOE economist Pill said on Thursday that policy makers must remain vigilant against inflation, however hinted the pace of hikes may slow.
GBPUSD dipped a little further on the news however, sitting down 1.18% this week in the 1.1920 region as we print. GBPEUR also declined sitting just above 1.1200 down 0.78% this week. The FTSE has dipped 0.51% since the open.
EURIsabel Schnabel one of the ECB’s most senior officials have said that investors risk underestimating inflation. She sees inflation remaining persistent and states that the ECB are still “far away from claiming victory”. She still sees significant upside risk in price pressures and was skeptical of the market’s opinion that inflation will fall quickly to the 2% target.
The euro has shed value trading near the 1.064 handle, having fallen from above 1.07 through yesterday. European equities have opened lower across the board.
USDUS initial jobless claims continue to point to extremely low numbers of layoffs. Despite this, continuing claims are gradual increasing which suggests that it’s taking longer for people to renter the workforce. At 194,000, this was fifth straight week below 200,000.
January’s PPI rose above the consensus, erasing last month’s decline. This has moderated the market’s expectations for disinflation over the coming year. Although primarily driven by energy, this paired with advancing Core CPI and retail sales suggests that the Federal Reserve will keep rates higher for longer.
Yesterday, the dollar rallied on comments from FOMC member Mester, who saw a compelling case for a 0.5% hike at the last Fed meeting. The dollar climbed 0.6% through yesterday, with the Dollar spot index surging above 104.
ASIA/PACIFICAsian shares fell with the Nikkei, Hang Seng and CSI printing down 0.66%,1.28% and 1.44% respectively.
Kazuo Ueda's nomination and BOJ chief is promoting investors to reassess Japan's future monetary policy - 70% of economists expect the central bank to tighten in July, up from the 54% forecast beforehand. The BOJ Executive Director Uchida announced that the BOJ will launch a pilot program for a central bank digital currency in April.
ILSUSDILS soared above 3.55, following some unexpected USD strength through yesterday. This dollar has continued to make gains against the shekel this morning trading 0.6% higher intraday above 3.56.
Data & EventsUS Jan. Import Price Index
US Jan. Lending Index
Fed’s Barking/Bowman speak.
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