Fed leaves interest rates on hold signaling march hike, Crunch time for UK prime minister as parliamentary pressure mounts, USDILS approaches key 3.2 level
January 27, 2022
GBP/USD 1.3424 GBP/EUR 1.1986 EUR/USD 1.1199 USD/CAD 1.2681 EUR/CHF 1.0378 EUR/SEK 10.4809 EUR/NOK 10.0366 EUR/DKK 7.4435 USD/ILS 3.1924 AUD/USD 0.7086 NZD/USD 0.6616 USD/SGD 1.3512 USD/JPY 114.98 USD/CNH 6.3689 USD/INR 75.1337 EUR/ILS 3.5754 GBP/ILS 4.2856 USD/ZAR 15.2683
The UK motor manufacturing industry had its worse year since 1956, with production slipping by 7%. Average rental values rose by 9.9% against last year according to Rightmove, which reinforces the impending cost-of-living crisis. Meanwhile markets are now betting on a BoE hike to 0.5% in February.It is widely expected that Sue Gray’s report into alleged parties held within Downing St will arrive in Westminster today.EUR
The euro had a weak start to the day, with EURUSD down -0.72% on yesterday’s close. Energy prices and geopolitical tensions continue to inject risk into European markets, as investors favour the stability and energy self-reliance of the greenback
European equities pushed higher into their recovery, the STOXX Europe 600 trades 2.72% from close on Monday, with the DAX up 2.99% and CAC40 up 2.99% and 2.86% respectively.USD
US equities continue to suffer from the risk off markets, with the Dow, NASDAQ and S&P500 all pushed lower by 1% – 1.5% yesterday.
The dollar’s recent run of strength continues, with the dollar index up 1.19% since Monday, fueled by uncertainty and consumer pressures in European safe havens. The dollar’s good run follows from the Fed decision to keep rate hike expectations as priced, stating it will “soon be appropriate” to raise rates. This aligns with the market predictions of a hike in March. The FOMC announced it will continue to reduce the pace of quantitative easing, ending asset purchases in early March.ASIA/PACIFIC
Chinese industrial profits rose 4.2% year on year in December, down 9% from the previous month. North Korea has fired six rounds of missile tests so far this month adding to tensions across the 38th parallel.
Asian equities tumbled again yesterday, with the MSCI Asia Pacific down 2.42%.ILS
Israel sold $2.78 billion worth of bonds YTD; Issuance was down 48% compared to the same period last year.
USDILS continues its climb, currently trading at 3.19, up 1.4% since Monday’s open at 3.1498.Data & Events
US – US Initial Jobless Claims
IT – Nov. Industrial Sales
EU – ECB Scicluna speaks
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