BoE at odds with inflation

Today's news headlines:

‘BoE governor says he is unable to stop inflation hitting 10%’. Yesterday saw Bank of England Governor Andrew Bailey speaking at the Commons Treasury Committee. While commenting on inflation and the cost-of-living crisis, the central banker reassured the public that inflation will fall from the expected autumn peak of 10% as criticism from Tory MPs in the last week has ramped up pressure for more active monetary policy. Bailey highlighted the war in Ukraine and China’s zero-Covid policy as headwinds to an already sticky economic environment which has only amplified price instability. (Financial Times)

‘IMF calls for urgent financial support to Ukraine’. With the war in Ukraine unlikely to end in the near term, the International Monetary Fund (IMF) has switched focus to the country’s economy. They have called on countries to provide more funding to plug governments fiscal gap estimated to be $15bn over the next three months as spending is focused on the ongoing conflict. The EU is expecting to have a finalised package by the end of the week in the form of Macro-financial aid. (Financial Times)


Today

Asian markets were buoyed overnight as tech stocks rallied following renewed hopes of easing Coronavirus restrictions in Shanghai with cases falling. US Sovereign yields have moved higher this morning while Brent crude hovers above $114 per barrel. European shares are higher across the board.

Events

UK Unemployment Rate (March): 3.7% (est. 3.8%)
Eurozone flash Gross Domestic Product q/q (Q1. 22): 10:00AM
Monetary Policy Committee member Jon Cunliffe speaks: 11:05AM
Federal Open Market Committee member James Bullard speaks: 1:00PM
US Retail and Core Retail Sales m/m (April): 1:30PM
European Central Bank President Christine Lagarde speaks: 6:00PM
Federal Reserve Chairman Jerome Powell speaks: 7:00PM
Federal Open Market Committee member Loretta Mester speaks: 7:30PM

Interbank rates:

GBP/USD – 1.2398
GBP/EUR – 1.1851
EUR/USD – 1.0461
USD/CAD – 1.2828

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