• richard evans

Central bank speakers take centre stage

Good morning


US data releases will be one hour earlier at 12.30 or 14.00 london time due to the US clock changes that took place at the weekend.


In addition, FX option expiries will be 14.00 london time, not the usual 15.00 london time.


This will be until Sunday 27th when we change our clocks in the UK



US dollar is very slightly higher today, helped by hawkish comments from Feds Powell yesterday who put the market on notice that Fed can and will raise rates 50bps at a time if required and could raise beyond ‘neutral’ if the need arose. 10 year yields pushing up above 2.3%, highest levels since May 2019. Goldmans say they see 50bps rises in both May and June, followed by four further 25bps rises through 2022.


Key mover is USDJPY which has traded up to 120.50, highest level for six years, I think the BoJs ongoing easy monetary policy while Fed and others are tightening is clearly a factor, perhaps also that notion I raised recently that yen is losing its ‘safe-haven’ status is having some impact. Yen crosses have been driven up accordingly, EURJPY now 132.35, some 800 points higher than the low just a couple of weeks ago.


GBP has not been too impacted, holding ground against the US dollar at 1.3160, and has made gains against EUR, with EURGBP at 0.8350 (GBPEUR 1.1975), I wonder whether the divergence between ECB and BoE monetary policy is starting to break through. We do have several ECB officials speaking today including Lagarde and Lane, we did have some slightly hawkish talk from ECB members over the weekend, it will be interesting to see whether todays speakers follow suit. EURUSD now 1.1000. Early tomorrow morning we see UKs latest inflation numbers released, expectations are for


I heard a Scottish official on TV this morning making it clear that Covid is still alive and kicking. 1.6 million people were infected across the world yesterday, they are the known numbers so real cases likely to be much higher. Case numbers in Scotland are up at the Jan 2021 peak which is quite alarming, hospitalisations were also up although he did stress that someone in hospital for, lets say a heart problem, who then tests positive is included in those numbers. The good news is the number of Covid patients in intensive care is far, far lower. We are still some way from WHO being able to declare the pandemic over and it is easy to be complacent. However our vaccinations do seem to be doing a decent job.


Ukraine continues to be bombarded by Russia, some areas are said to be pretty much completely destroyed. Attacks are reported to have increased over the past 24 hours. Biden continues to warn thas Putin is being backed into a corner and as such is more likely to use chemical or biological weapons. There is some talk that residents of Mariupol have been sent to Russia, although exact details are obviously difficult to gather. Ukraines President Zelensky seems open to direct peace talks with Putin but has made it clear any agreement will be for Ukraine to decide and that he will not bow to Russian pressure.


So, little economic data today but plenty of central bank speakers. Other than Lagarde and Lane, BoEs Cunliffe may be worth hearing from this afternoon, he was the sole MPC member who voted to keep rates unchanged at the last meeting. See if he explains his thinking.


- 09.00 EU current account

- 10.00 EU construction output

- 12.10 ECBs Villeroy speaks

- 13.10 ECBs Panetta speaks

- 13.15 ECBs Lagarde speaks

- 14.35 Fes Williams speaks

- 15.15 BOEs Cunliffe speaks

- 15.15 SNBs Jordan speaks

- 18.00 ECBs Lane speaks

- 07.00 UK CPI, RPI, PPI


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