UK House prices post largest decline in a decade, US consumer confidence slips, euro extends gains against the dollar.
March 1, 2023
GBP/USD 1.2070 GBP/EUR 1.1342 EUR/USD 1.0642 USD/CAD 1.3609 EUR/CHF 0.9975 EUR/SEK 11.0860 EUR/NOK 10.9878 EUR/DKK 7.4445 USD/ILS 3.6228 AUD/USD 0.6763 NZD/USD 0.6252 USD/SGD 1.3415 USD/JPY 135.85 USD/CNH 6.8889 USD/INR 82.5000 EUR/ILS 3.8552 GBP/ILS 4.3726 USD/ZAR 18.1865
The BRC reported that shop price inflation in the UK rose 8.4% last month, with food prices rising 14.5%, the fastest pace since 2005.
Nationwide figures show that UK house prices have posted the largest decline in a decade as inflation and higher mortgage rate hit prospective buyers. Property prices fell 1.1% in February compared with the same month last year, the largest decline in a decade, down from a 1.1% increase in January. Outside of the pandemic, the last time UK house prices contracted on an annual basis was December 2012.
BOE's Mann states that cheaper energy prices risk bosting core inflation, promoting the public to spend more on other things.
GBPUSD dipped through US and session before rebounding in Asia and into this morning after reaching highs of 1.2143 following the positive news of a potential UK-EU post-Brexit trade deal. GBPUSD trades up 1.06% this week. GBPEUR also gained yesterday before retracing after London close, reaching highs of 1.1422. GBPEUR sits in the 1.1340 region as we print up 0.14% this week.EUR
The euro has extended its gains against the dollar, following stronger inflation figures from Germany’s most populous state. The North Rhine-Westphalia number printed at 8.5% YoY against 8.3% previously, driven by higher food prices. The state print is often used an indication of the national reading due later today. This, along with similar data from Spain and France yesterday, have boosted expectations of further rate hikes from the European Central Bank. Comments from ECB member Muller added support, citing although monetary policy seems to be having an impact, inflation remains too high. EURUSD trades 0.65% higher this morning at 1.0645.
Manufacturing PMIs for Spain and Italy both beat expectations, printing above the key 50 level to indicate expansion in the sector. The same reading for France and Germany however disappointed, both falling from previous levels and failing to meet forecasts. The German unemployment rate remained unchanged at 5.5%. Stocks ticked higher as a recovery in Chinas economy booster sentiment, the Stoxx Europe 600 added 0.2%, with mining and consumer products leading the way.USD
A growing number of American companies have turned much more pessimistic over operations and supply chain dependencies in China. Covid-zero disruptions have significantly dented profits, and worsening relations between Beijing and Washington continue to threaten stability. A combination of these factors is prompting several businesses to reconsider their position in the country.
US consumer confidence unexpectedly dropped in February as it slipped to 102.9 far below the consensus of 108.5. The reading was primarily driven by readings of future business conditions, job availability and income.
The dollar trades considerably lower today, with the dollar spot index trading 0.4% lower as we print.ASIA/PACIFIC
Chinese Premier Li Keqiang is set to deliver this last government work report on Sunday when the annual NPC kicks off. He is set to be targeting growth higher than 5% through 2023.
Australian inflation decelerated to 7.4% YoY in January, cooling more than expected.ILS
USDILS trades 1% lower by almost 1%, trading just above 3.61. The Israeli budget proposal which was approved last week will incur a budget deficit of 0.9% of GDP for 2023.Data & Events
Euro-Area Manufacturing PMI
UK Manufacturing PMI
Germany Feb CPI
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