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  • richard evans

Boris remains....for now

Good morning

February has started with USD slightly on the back foot, some Fed officials with less hawkish comments. They are not moving away from rate rises, but perhaps showing that four or five rate rises is not a given, nor is a 50bps rise in March. Bostic still sees three rises in 2022 while Daly also seems to be happy with three rises. George more hawkish, calling for a sharp reduction in Feds balance sheet, Barkin says businesses will welcome rate rises.

Boris Johnson apologises on release of the Sue Gray report into government gatherings. He draws the line at resigning, saying simply he will fix what has gone wrong. The report has criticised the gatherings, many of which are still under investigation by the police. Johnson appears to have no intention of resigning, but we do need to wait for the police report before he can be comfortable that his own party won’t demand his removal.

EUR is up despite weak German retail sales this morning, EURUSD at 1.1260 having been 1.1130 late last week, EUR has also made a bit of ground against GBP with EURGBP now 0.8360 (GBPEUR 1.1965). ECB meeting later in the week, some thinking they will sound a little less dovish than they have previously after German inflation numbers yesterday surprised to the upside.

RBA were certainly on the dovish side overnight, not willing to be drawn into rate rise talk despite market pricing. AUD did drop, AUDUSD slipped from 0.7075 to 0.7035 but as I type this most recent bout of USD weakness sees the pair up at 0.7085. AUDNZD dropped from 1.0750 to 1.0700, it has since regained most of those losses, now 1.7035. RBAs Lowe speak tonight, I wonder whether we will see him giving a little more colour on RBA thinking.

Ukraine tensions remain high although there was a small glimmer of hope on reports Russia had written to US ahead of a call between their respective officials. We don’t know what was in the letter but some see it as a sign that there may be room for more discussions. Russia still say they have no intent to attack Ukraine, the West still preparing hard sanctions if there is any aggression. UK PM Johnson is set to visit Ukraine, US have evacuated staff in Belarus over the large Russian military troop build-up there.

Plenty of manufacturing PMI data out today which could make things interesting although I’m rather thiniing we could see a quiet day or so ahead of the BoE and ECB rate meetings. Could give me time to go over the football transfer deadline deals. Certainly seems to have been a busy time for Spurs, getting rid of four midfielders and gaining two.

- 09.00 EU markit manufacturing PMI

- 09.00 ECB bank lending survey

- 09.30 UK markit manufacturing PMI

- 10.00 EU unemployment

- 13.30 CAD GDP

- 14.30 CAD markit manufacturing PMI

- 14.45 US markit manufacturing PMI

- 15.00 US manufacturing ISM

- 21.45 NZ unemployment

- 00.01 UK BRC shop prices

- 01.30 RBAs Lowe speaks

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