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  • richard evans

Strong start to 2022 for GBP

Good morning

Equities a little mixed by the US close and in Asian markets overnight, tech stocks being hit the most. GBP remains a clear winner though with GBPUSD up to 1.3550 and EURGBP to 0.8345 (GBPEUR 1.1980). The strength in GBP seems to be driven by both interest rate expectations plus also the hope that we will be able to ride out this Omicron wave without any major lockdowns. Yes, the numbers are frightening, with almost 220,000 new cases reported yesterday but so far hospitalisations remain well below the highs from last Jan. It’ll be at least a couple of weeks before we can feel really comfortable.

There is some talk in the press of a new variant in France that is highly transmissible, more severe and more resistant to vaccines but as yet it is not regarded as a ‘variant of concern’. Whether it becomes one or not, it is reasonable to assume that Omicron will not be the last variant we will face over the coming months. But we hope vaccines, Covid pills and treatments will hold off another lockdown.

My kids school reopens today, although their physical return is staggered while they are tested for Covid on-site. Only one is actually there today, the others are having online lessons. I’m very keen to see the results given the mixing over New Years eve celebrations.

Not a great deal in the way of market news, Feds Kashkari has said he looks for two rate rises in 2022, back in Sept he had not expected any. I’d imagine we’ll see more hawkish comments from Fed officials in the coming days and weeks. EURUSD remains stuck around the 1.1300 area.

For Bitcoin watchers, Goldmans have suggested $100,000 could be a price target. Currently $46,000, this is not the first time the $100,000 mark has been talked about. I still can’t bring myself to get involved, a decision I may one day regret but I’ll take my chances.

So with little to get too excited about it looks like another day of new year admin! Weather looks like its getting cold, it’s my first training session since the holidays this evening and we’ll be lucky if temperatures are above zero. I’ve got used to curling up on the sofa watching some TV box set. This’ll be a bit of shock to the system!

- 09.00 EU markit services PMI

- 13.15 US ADP employment

- 13.30 CAD building permits

- 14.45 US markit services PMI

- 19.00 FOMC minutes

- 01.45 China caixin services PMI

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