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Change in expectations

Today's news headlines: 

‘NHS warns of “significant reduction” in vaccine supplies’. It looks like there will finally be a bump in the road for the UK’s vaccination programme, which has performed well since the first inoculation on 8th December. Supply issues look set to hit the nation in early April and lasting for a month, potentially delaying the rate of vaccination for the under 50’s. There is concern that the easing of restrictions in the UK could be postponed if there is a substantial drop off from the target of two million vaccinations per week. (Financial Times)

‘Fed signals no rate rise until at least 2024 despite growth upgrade’. The Federal Reserve has raised this year’s growth projection to 6.5% potentially quantifying the impact of the $1.9tn stimulus package signed into law last week. Unemployment is also predicted to fall to 4.5%, at a faster rate than forecast in December. Maintaining this Dovish stance, the Fed re-affirmed their position of full employment and a 2.0% inflation target before interest rates are to move at all. (Financial Times)  

Today's events, rates, and data 

  • Yesterday, major US indices finished higher at the close after the hike in growth expectations by the Fed, with the Dow Jones up 0.58%. Cable is trading higher today, back above the $1.3950 level.  EUR/USD has followed suit and is trading around the €1.1950 level. However, comments from the Fed have not helped bond yields, with the US 10-Year Treasury yield up to 1.72% this morning.

Today's events

Australia Unemployment Rate: 5.80% vs 6.30% last month.
ECB President Lagarde Speaks: 11:00am
BOE Monetary Policy Summary: 12:00pm
Canada ADP Non-Farm Employment Change: 12:30pm
MPC Member Andy Haldane Speaks: 12:30pm
US Philly Fed Manufacturing Index: 12:30pm
US Unemployment Claims: 12:30pm

Interbank rates

GBP/USD: 1.3967
GBP/EUR: 1.677
EUR/USD: 1.1960
USD/CAD: 1.2393

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