Today's news headlines:
‘Fed’s Brainard Vows to Fight Inflation for ‘as Long as It Takes’’. The Federal Reserve cannot afford to risk pulling back too soon on tighter monetary policy but will focus on the data before its next rate meeting. While Vice Chair Brainard gave no indication of her preference for 50bps or 75bps, she reinforced the central bank’s hawkish position that rates will need to rise into restrictive territory. With Fed Chair Powell due to speak later today, policymakers are using the time before their pre-meeting blackout to reaffirm their commitment to bringing inflation down. (Bloomberg)
‘ECB on Verge of Jumbo Hike to Rein In Prices’. It’s widely expected that the European Central bank will raise headline interest rates from 0.00% to 0.75% today, even as the risk of a Eurozone recession rises. Markets will also get an insight into updated growth and inflation forecasts out of Europe, with current inflation running at 9.1%—almost five times the ECB’s target. An outsized move will see the central bank join more than 40 others that have employed significant hikes to combat inflation and could send a message to critics who claimed policymakers have been too slow to react to major events. (Bloomberg)
Overnight, the broad-based US Dollar sell-off meant the Euro crept above parity against the Greenback while USD/JPY also moved lower from levels not seen since 1998. The catalyst for the move came as energy, both oil and gas, sold off late yesterday, while investors are also keen to see whether the ECB will hit markets with 75bps of rate hikes today. Meanwhile, the Pound fell to levels not seen since the mid-eighties.
UK RICS House Price Balance: 53% vs 62% previously
European Central Bank Main Refinancing Rate: 1:15PM
ECB Monetary Policy Statement: 1:15PM
US Weekly Jobless Claims: 1:30PM
ECB Press Conference: 1:45PM
US Federal Reserve Chair Powell speaks: 2:10PM
Please contact your Dealer about any upcoming FX requirements you may have, or call +44 (0)20 3465 8200.
*Indicative interbank rates taken on the day of writing. Please speak to your Dealer to find out the current rates available for you.