US equities and bonds dropped on prospect of swift reduction of Fed debt holdings; Russia faces fresh sanctions; Fed’s March minutes top of agenda
April 6, 2022
GBP/USD 1.3070 GBP/EUR 1.1995 EUR/USD 1.0896 USD/CAD 1.2495 EUR/CHF 1.0173 EUR/SEK 10.2624 EUR/NOK 9.5441 EUR/DKK 7.4379 USD/ILS 3.2173 AUD/USD 0.7591 NZD/USD 0.6959 USD/SGD 1.3598 USD/JPY 123.92 USD/CNH 6.3712 USD/INR 75.6013 EUR/ILS 3.5053 GBP/ILS 4.2048 USD/ZAR 14.6668
Covid cases in England reached their highest since the pandemic begun last month, driven by the Omicron subvariant. The UK is also to review legislation banning fracking, potentially to ease rising oil prices.
The pound trades lower against the dollar by -0.1% and stronger against the euro by 0.1%. The FTSE100 closed yesterday up 0.73%.EUR
ECB’s Lane has predicted that euro-area inflation will peak by mid-year once the energy-price shock eases.
The Irish economy is seen growing 6.1% this year, down from a forecast of 8.7%. The Polish central bank will likely raise interest rates for a 7th straight meeting after inflation jumped into double digits.
The STOXX 600 closed lower by -0.84% yesterday. The euro trades lower against the dollar by -0.17%, trading just above yearly lows.USD
Investors will closely scrutinise the FOMC’s March minutes. The minutes are expected to focus on the balance-sheet runoff, outlining several scenarios by which the Fed can reduce its asset purchases. This decision could weigh heavily on markets as balance sheet changes could have similar impacts as an additional rate hike.
This follows Lael Brainard’s comment which shook market yesterday, indicating that the balance-sheet runoff will be rapid.
The DXY trades higher by 0.22% as we print. US equities slipped following Brainard’s comments yesterday.ASIA/PACIFIC
Sri Lanka’s president revoked the emergency rule he imposed, after facing calls to step down. China’s Caixin services PMI fell to 42 in March, well below the 49.7 estimate.
Australia’s government borrowing is expected to swell 8% to $1.15 trillion this year, the fastest expansion outside of any major developed market.ILSUSDILS closed up 0.5% yesterday as it continues its recovery from lows of 3.17.Data & Events
DE – Feb Factory Orders
UK – Construction PMI
EU – Feb PPI
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