• richard evans

PMIs and central bank speakers dominate calendar today

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 yields dipped yesterday, the 10 year moving from 2.4% to around 2.29%, the US dollar did trade a little lower but overall its now a touch higher than it was this time yesterday, while yields have recovered to mid 2.30’s . Several Fed speakers on the calendar today, watch for mention of a 50bps rate rise in May.

UK’s budget deficit has shrunk with net borrowing this year expected to be around £128bn, some £55bn less than had been expected a few months ago. This is helped by higher tax revenues although its worth noting that with higher interest rates and less economic support, the deficit reduction is likely to slow. Sunak used a little of the good news to help households, such as a 5p cut in fuel duty and a £3000 rise in the national insurance threshold, but as I mentioned yesterday this help was not overly generous. A 1p cut in income tax in April 2024 is something to look forward to! GBPUSD now 1.3180, EURGBP 0.8330 (GBPEUR 1.2005). EURUSD 1.0980.

Norges Bank set to announce a 25 bps rate rise this morning, EURNOK currently just below 9.50, lowest levels since late 2018. NOK likely to remain supported as rate expectations continue to push higher.

Putin is demanding ‘unfriendly’ foreign countries pay for oil and gas in roubles rather than dollars, sending oil and gas prices sharply higher. This would certainly serve to counter some of the recent weakness in rouble if it were to work, Germany insists it is a breach of contract, but I’m not sure Putin really cares about that. Further sanctions on Russia expected to be announced tomorrow. Today marks one month since the Russian invasion of Ukraine. I have seen some aerial footage of Ukraine showing the destruction caused so far, it really is quite horrific and still rather unbelievable, even though sadly we all know how real it is.

USDJPY blasted through yesterdays high of 121.50, reaching 121.75 before settling back to the mid 121s’s. Yen weakness has been helped by recent calls for further BoJ easing, BoJs Katoka once again talking about the need for aggressive buying of Japanese bonds.

My father-in-laws 80th birthday today so I’m out and about a little to celebrate although the main family event is over the weekend.

- 09.00 Norges Bank rate announcement

- 09.00 EU markit services, manufacturing PMI

- 09.30 UK markit services, manufacturing PMI

- 09.30 ECBs Elderson speaks

- 10.30 UK FPC minutes

- 12.30 US durable goods, initial jobless claims

- 13.10 Feds Waller speaks

- 13.45 US markit services, manufacturing PMI

- 13.50 Feds Evans speaks

- 15.00 Feds Bostic speaks

- 23.30 Japan Tokyo CPI

- 00.01 UK GfK consumer confidence

- 07.00 UK retail sales

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