UK risks markets losing confidence in economy, EU to intervene in power markets, Asian stocks slip following weak Chinese factory output.
August 31, 2022
GBP/USD 1.1648 GBP/EUR 1.1627 EUR/USD 1.0019 USD/CAD 1.3088 EUR/CHF 0.9774 EUR/SEK 10.6980 EUR/NOK 9.8906 EUR/DKK 7.4382 USD/ILS 3.3297 AUD/USD 0.6884 NZD/USD 0.6141 USD/SGD 1.3968 USD/JPY 138.55 USD/CNH 6.8977 USD/INR 79.4588 EUR/ILS 3.3359 GBP/ILS 3.8784 USD/ZAR 16.9973
Rishi Sunak has said the next PM faces the risks of markets losing confidence in the UK, and Britain’s economy. He echoed fears from industry experts regarding Liz Truss’ tax and spending commitments.
GBPUSD slipped lower by -0.75% through yesterday.EUR
Today sees more European inflation data, which could stoke fears for the ECB. French inflation is expected to moderate at 6.7%, whilst Euro-area inflation could accelerate. The contrasting inflation outlook across the bloc could add to the complexity of the ECBs mandate.
European energy prices plunged after the EU announced its intention to intervene in power markets. The Nord stream pipeline is set to shut for maintenance today for three days.USD
The ADP report may show companies added 300,000 positions in August. The Biden administration is expected to stop purchasing Covid-19 vaccines in January due to a lack of funds. Vaccines will have to be provided by insurers.
US equities fell through yesterday’s session with the bearish market bolstered by a hawkish Fed.ASIA/PACIFIC
Chinese factory output pushed Asian markets lower across the board. Factory activity was slightly better than august, however, remained below 50 for a second month at 49.4.
Japanese industrial production gained 1% in July from June.ILS
USDILS continues to make small gains through this week, trading up 1.6% from Friday.Data & Events
US ADP Employment Change
Trading in financial instruments may involve a high degree of risk and may not be suitable for all investors. Trading in financial instruments can result in both loss and profit. Investors should carefully consider whether financial instruments suit their needs, financial resources and personal circumstances.
The information contained in this material is solely for informational purposes only and it is not and should not be construed as an offer or a solicitation of an offer to buy or sell any financial instruments and cannot be relied upon as a representation that any particular transaction necessarily could have been or can be effected at the stated prices. This material does not contrue advice.
For more analysis on FX markets or information regarding SVB's FX services:
0800 023 1440 from within the UK
+44 207 367 7880 from overseas
See all of SVB's latest FX information and commentary.
© 2022 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB).
Silicon Valley Bank is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. FC029579. Silicon Valley Bank is authorised and regulated by the California Department of Business Oversight and the United States Federal Reserve Bank; authorised by the Prudential Regulation Authority with number 577295; and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. Silicon Valley Bank is a subsidiary of SVB Financial Group, a Delaware corporation and is an affiliate of SVB Financial Group UK Limited. SVB Financial Group UK Ltd is registered in England and Wales at Alphabeta, 14-18 Finsbury Square, London EC2A 1BR, UK under No. 5572575 and is authorised and regulated by the Financial Conduct Authority, with reference number 446159. SVB Financial Group and its subsidiary Silicon Valley Bank are members of the Federal Reserve System and Silicon Valley Bank is a member of the FDIC.
Your eligible deposits with Silicon Valley Bank UK are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme. Any deposits you hold above the limit are unlikely to be covered. Please click here for further information or visit http://www.fscs.org.uk. For more detailed information about coverage and limits, please review our FSCS Information Sheet at http://www.fscs.org.uk.
This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources. Opinions expressed are our opinions as of the date of this content only. The material is based upon information which we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such.