Mounting expectations

Today's news headlines: 

‘UK inflation set to hit 30-year high as rate rise expectations mount’. UK inflation looks set to hit a 30-year high in December, with analysts expecting a headline print of 5.2% this Wednesday. Prices continue to soar, most notably in the energy market. It’s anticipated that the UK government will try and contain the price pressures consumers face by implementing an energy price ceiling. The Bank of England is due to meet on the 3rd of February, with KPMG forecasting three interest rate hikes this year. (Financial Times)

‘Covid passes boosted economies and vaccine uptake, study shows’. Studies have shown that the deployment of Covid passes throughout Europe facilitated economic growth and increased vaccine uptake during the pandemic; France’s vaccination rate climbed 13.0% as a result. Without these interventions by the government, analysts expect Gross Domestic Product would have been between €1-6bn lower in France, Germany, and Italy. The use of Covid certificates, viewed as controversial by some, has helped countries return to some sort of economic normalcy. (Financial Times)


Today

Asian markets dipped lower overnight while US Treasury yields climbed; the two-year yield hit 1.0%, the highest for two years. The UK posted strong labour market data this morning, with the headline Unemployment Rate falling to 4.1%. The US Dollar Index is trading above the $95 handle today.

Events

UK Unemployment Rate (Nov): 4.1% (est. 4.2%)
Eurozone ZEW Economic Sentiment: 10:00AM
German ZEW Economic Sentiment: 10:00AM
US Empire State Manufacturing Index: 1:30PM
Australia Westpac Consumer Sentiment: 11:30PM


Interbank rates:

GBP/USD – 1.3642
GBP/EUR – 1.1968
EUR/USD – 1.1398
USD/CAD – 1.2510

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