Good morning
Feds Powell did confirm he is focussing on inflation which has proved more persistent than anticipated. A rate rise in June looks most likely, as I mentioned yesterday there are some looking for four rate rises through 2022. US 10 year yields sit at 1.75%, USD is actually a little weaker, perhaps due to Powell not seeming to want to rush balance sheet reduction. US inflation this afternoon likely to be the highlight, comes on the back of weaker Chinese inflation overnight, not great correlation with US numbers but may be enough to keep inflation watchers on their toes.
GBPUSD currently 1.3635, EURUSD at 1.1365, which puts EURGBP at 0.8333, significant as it makes GBPEUR 1.2000. EUR struggling to keep up while ECB are behind both Fed and BoE on potential rate increases. CAD has performed well over the past few days, USDCAD moving from 1.2800 or so down to 1.2550 helped by calls for a series of rate rises to deal with inflation.
The WHO have said that half of Europe will have been infected with Omicron within six to eight weeks. Sounds pretty horrific although not only is Omicron not quite as severe as other strains, there is also some thinking that an Omicron infection may actually offer the ‘victim’ better protection against Covid in general. Does this mean we should be trying to catch it?
A press conference this afternoon may give us more insight into the Russia/Ukraine crisis. I’m not feeling a great sense of optimism here.
Boris Johnson faces a backlash over the Covid parties and is in a precarious position, with some of his own party deeply unhappy with the breaking of their own restrictions. Perhaps they weren’t invited. Anyway pressure will be on Boris, will we see any apology, will he be forced to resign, will he just ignore it all and carry on? All possible but Conservatives must be worried about Boris as leader when we head into the next general election. That’s still some way off mind you, May 2024 I believe. Anyway PMQ today will be interesting to see what he has to say for himself.
- 10.00 EU industrial production
- 12.30 NATO/Russia press conference
- 13.30 US CPI
- 19.00 US monthly budget statement
- 21.45 NZ building permits
- 00.01 UK RICS house prices
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