US inflation hits 40-year high; ECB to accelerate withdrawal of monetary stimulus; UK GDP growth stagnates.
March 11, 2022
GBP/USD 1.3083 GBP/EUR 1.1898 EUR/USD 1.0997 USD/CAD 1.2768 EUR/CHF 1.0223 EUR/SEK 10.6527 EUR/NOK 9.8388 EUR/DKK 7.4417 USD/ILS 3.2586 AUD/USD 0.7346 NZD/USD 0.6850 USD/SGD 1.3589 USD/JPY 116.75 USD/CNH 6.3280 USD/INR 76.5550 EUR/ILS 3.5834 GBP/ILS 4.2633 USD/ZAR 15.0701
UK GDP growth is expected to stagnate in January growing only 0.1% month on month. 1Q GDP growth is forecast to be 0.5%. Furthermore, UK large caps outperformed smaller businesses by 15%, reliant on foreign revenue to underpin their performance.
UK manufacturing production jumps by 0.8% MoM in January, exceeding the 0.2% forecast. GBPUSD trades down -0.05% around 1.308. FTSE futures are up 1% at time of writing.EUR
The ECB decided in yesterday’s meeting to withdraw monetary stimulus faster than what the market was expecting. Rising inflation compounded by the Ukraine war has forced ECB leaders to act earlier than previous indications.
German inflation data will likely confirm prices rose 5.1% in February. European markets fell yesterday, the STOXX finished down -3.04%. EURUSD fell yesterday despite a more hawkish approach from the ECB.USD
The US continues to decide on releasing oil reserves, as Brent Crude is currently priced at $112, down considerably from weekly highs of $133. To compound commodity price rises, the US will likely move to impose higher tariffs on Russian imports, following the passing of a Ukrainian aid bill.
US inflation hit a 40-year high before this week’s oil price, with Fuel, Food and Rent driving prices higher. CPI YoY registered at 7.9% yesterday, and jobless claims were 10k higher than expected at 227k.
US equities fell slightly with the NASDAQ 0.95% lower. The DXY trades up 0.15% as we print.ASIA/PACIFIC
Only the CSI saw gains throughout the Asian session this morning, closing 0.32% higher. Meanwhile the Nikkei lost 2% and the ASX lost 1%.
China has continued to call for a cease-fire in Ukraine, despite carefully avoiding to directly criticise Russia.
USDJPY is up 1.7% on the week, following yesterday’s 0.53% jump intraday.ILSA flat day in trading for USDILS yesterday, finishing around 3.26. A different market compared to the high volatility seen on Monday and Tuesday of this week.Data & Events
UK – Jan GDP, Trade Balance, Industrial Production
DE – Feb CPI
ES – Feb CPI
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