Balancing act

Today's news headlines:

‘Jay Powell says Fed prepared to move more aggressively to tighten policy’. Federal Reserve Chairman Jerome Powell made especially hawkish comments yesterday at the National Association for Business Economics conference. He indicated the need to return to more neutral monetary policy by scaling back the central bank’s balance sheet and taking the federal funds rate to 2.4%. The Fed hiked rates for the first time since 2018 last week despite potential growth concerns surrounding the Russia-Ukraine conflict. (Financial Times)

‘Public finance windfall for Sunak ahead of spring statement’. UK Chancellor Rishi Sunak has been given a boost ahead of the Spring Statement tomorrow. The latest data on the country’s public finances have come in better than expected, providing the Chancellor with a potential £30bn windfall that could help households across the UK during this cost-of-living crisis. The conflict in Ukraine and overall heightened market uncertainty are reasons to be prudent, according to Sunak. (Financial Times)


Today

Asian markets ticked higher overnight as the S&P 500 broke its four-day rally yesterday. WTI Crude is trading above $110 per barrel this morning, the US Dollar Index has gained 30 basis points, and European markets have bounced in early trade.

Events

UK Public Sector Net Borrowing 12.3B (est. 8.5B)
UK CBI Industrial Order Expectations: 11:00AM
European Central Bank President Christine Lagarde speaks: 1:15PM
Federal Open Market Committee member John Williams speaks: 2:35PM
Swiss National Bank Chairman Thomas Jordan speaks: 3:15PM
Monetary Policy Committee member Jon Cunliffe speaks: 3:15PM
Federal Open Market Committee member Loretta Mester Speaks: 9:00PM

Interbank rates:

GBP/USD – 1.3155
GBP/EUR – 1.1969
EUR/USD – 1.0991
USD/CAD – 1.2599

The markets are moving. To speak to our team, please call +44 (0)20 3465 8200.