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Fed eyes 50 basis-point hike

Today's news headlines:

‘Jay Powell signals Fed is prepared to raise rates by a half-point in May’. A 50 basis-point interest rate hike by the Federal Reserve is looking increasingly likely for the May meeting. On a panel with the International Monetary Fund (IMF) yesterday, Fed Chairman Jerome Powell suggested that a half-point rise will be a serious consideration as the central bank attempts to restore price stability. Markets are pricing in three 0.50% hikes between now and July, with a projected year-end policy rate of 2.77%. (Financial Times)

‘UK consumer confidence plunges to near record low’. UK consumer confidence dropped to its lowest levels since the 2008 financial crisis in April, with the Gfk index falling to -38. Energy prices, higher taxes, and inflation sitting at a 30-year high are all putting pressure on the consumer’s pocket. These concerns fed through into the March print for retail sales, which fell 1.4%—much more than analyst expectations⁠—as discretionary spending contracts⁠. (Financial Times)

Asian markets followed US stock markets lower overnight following hawkish comments from Federal Reserve Chairman Jerome Powell. The US Dollar has been boosted this morning, gaining 0.20%, while short-dated US Treasury yields move higher. European markets have opened lower across the board.


UK Gfk Consumer Confidence: -38 (est. -33)
UK Retail Sales m/m (Mar): -1.4% (est. -0.3%)
German flash Manufacturing Purchasing Managers' Index: 54.1 (est. 54.6)
German flash Services PMI: 57.9 (est. 55.4)
UK flash Manufacturing and Services PMIs: 9:30AM
Canada Retail and Core Retail Sales m/m: 1:30PM
European Central Bank President Christine Lagarde speaks: 2:00PM
US flash Manufacturing and Services PMIs: 2:45PM
Bank of England Governor Andrew Bailey speaks: 3:30PM​​​​​​​

Interbank rates:

GBP/USD – 1.2925
GBP/EUR – 1.1955
EUR/USD – 1.0811
USD/CAD – 1.2630

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