13/07/2022

Markets fear the energy crisis will push the Eurozone into recession

EUR The euro remained under pressure for most of yesterday and teetered on the brink of parity against the US dollar. There are a number of reasons why the euro has weakened significantly but the most recent cause is the fear of an energy crunch in the Eurozone. The Nord Stream 1 pipeline, which brings … Read more

12/07/2022

PM’s resignation adds to the uncertainty around the UK economy

GBP Yesterday we saw the pound dropping to a two-year low – traders moved to the sidelines while the Conservative leadership contest kicked off to determine the next Prime Minister. Johnson’s resignation has deepened the uncertainty in the UK economy, taking into consideration the soaring inflation and recession risks. GBP/USD was trading at 1.1867 which … Read more

11/07/2022

Politics as the key driver for Sterling this week

GBP Political uncertainty is the hot topic in the UK following last week’s resignation of Boris Johnson. Up to ten conservative MP’s have now thrown their hat in the ring to become the new Conservative leader with no clear front runner at present. In spite of the situation, Sterling has remained stable posting gains against … Read more

06/07/2022

GBP/EUR rate restricted as Brexit continues to dominate

GBP Sterling continues to be pressured by domestic issues and worries about the government’s controversial Northern Ireland Protocol Bill which could trigger a trade war with the European Union. Expectations that the Bank of England would decide to approach raising interest rates gradually amid the ongoing cost of living crisis further contributed to the GBP/USD … Read more

04/07/2022

The UK ten-year government bond yield fell 5%

GBP Sterling fell heavily against both the euro and dollar on Friday as UK government bond yields declined, hinting that the market is paring back its expectations for future Bank of England interest rate rises. The UK’s ten-year government bond yields fell 5.0% on July 1st and was back to levels seen on May 31st. … Read more

30/06/2022

Data suggests Germany is on course to pass inflation peak

GBP After the Bank of England Governor Bailey’s speech yesterday, markets are projecting the BoE is likely to hike rates again in August by a further 25 basis points with the ambition to tackle the soaring inflation in the UK. Although money markets have priced in a 25 bps hike, they also believe there’s a … Read more

29/06/2022

The US dollar fell against most major currencies yesterday

USD The dollar fell against most major currencies yesterday as a decline in US bond yields leads investors to continue worrying about the risk of a recession. The dollar index, which measures the strength of USD against six of its major peers, fell by 0.08% giving back some of its recent rally of 0.53% largely … Read more

28/06/2022

Sterling gains to be capped for the second half of the year

USD The recent slump in commodity prices which has been caused by global recession fears has, at the start of this week, eased concerns amongst some investors about the persistent rise in inflation and as a result forced investors to scale back overly hawkish expectations for policy tightening from the Federal Reserve. Futures pricing is … Read more

27/06/2022

Easing of Covid restrictions in China encourages equity market

GBP Sterling strengthened against the US dollar on Monday as global risk sentiment improved. Equity market rose as an easing of covid-19 restrictions in China boosted commodity prices. However inflation continues to surge in major economies and printed in line with expectations at 9.1%, up 0.1% from April. Higher-than-expected inflation readings, at a time when … Read more

24/06/2022

US PMI data disappoint markets

USD Yesterday’s PMI releases were surprisingly positive for the UK whilst the euro and US data missed. The S&P Global US Manufacturing PMI read at 52.4 for June which represents a significant slowdown on May’s 57 and is far below forecasts of 56. Whilst US service PMI showed a reading of 51.6 for this month, … Read more

23/06/2022

PM under more pressure as crucial by-elections are under way

GBP The British pound eased on Wednesday after record high UK consumer inflation data raised new worries over an economic slowdown, just as the Bank of England looks set for more interest rate hikes in the coming months. The figure matched market expectations and following its release, markets continued to fully price in a 25 … Read more

22/06/2022

UK inflation continues to climb

GBP The pound fell after the release of UK Inflation data on Wednesday morning. UK CPI rose to 9.1% year on year, which was inline with market expectations. The month-on-month increase was 0.7%, which is more than the consensus was looking for at 0.6% but a sharp decline on the previous figure of 2.5%. Core … Read more

21/06/2022

UK house prices see lowest increase since January

GBP Market movement was relatively limited yesterday due to the US bank holiday and quiet economic backdrop, and as a result Sterling remained range-bound without any significant breaks from current support or resistance levels. One headwind, which Sterling continues to face in the wake of last week’s Bank of England interest rate decision, is investors’ … Read more

20/06/2022

French parliamentary election results more worrying for the eurozone

GBP Last week was a turbulent one for the markets with general trends and key events causing investors to weigh up their positions ahead of interest rate decisions. Both the US and UK hiked interest rates by 0.75 and 0.25 basis points respectively. With the Federal Reserve and the Bank of England signalling further rate … Read more

16/06/2022

UK interest rates expected to rise to 1.25%

USD Yesterday the Federal Reserve embarked on their largest interest rate hike in more than twenty-five years to try combat spiralling inflation. They raised interest rates by 75 basis points. With the Fed committed to curb inflation, tightening of credit condition is starting to have a knock on effect on the stock market and will … Read more

15/06/2022

All eyes are on the Bank of England and the Fed this week

GBP The UK’s Office for National Statistics reported on Tuesday that the ILO Unemployment Rate edged higher to 3.8% in three months to April from 3.7% previously. This print came in weaker than the market expectation of 3.6%. The weaker data followed the pound entering into bearish conditions against the euro, dropping below 1.17. Sterling … Read more

13/06/2022

US inflation once again beat expectations

GBP Sterling, much like many currencies, entered the weekend on the back foot against the dollar as US inflation once again beat expectations. Investors believed inflation was set to ease in the month of May but a reading of 8.6% saw many currencies give up gains achieved earlier in the week. Most notably core inflation, … Read more

10/06/2022

UK economy under pressure

GBP The Pound came under pressure in the previous session amid growing concerns over the health of the UK economy. UK construction activity slowed to 56.4 in May, down from 58.2 in April, marking the lowest reading since January. Delving deeper into the figures, they revealed that the construction of new homes almost stalled as … Read more

01/06/2022

Inflation continues to rise

EUR The euro had a mixed day on Tuesday remaining relatively range-bound as data showed European inflation had risen to its highest level since the single currency was created in 1999. According to the data released by the Eurostat, European inflation for May year-on-year surged to 8.1% in May, up from 7.5% in April surpassing … Read more