Peer pressure builds for ECB

Today's news headlines:

‘ECB defies global peer pressure after Fed-led tightening round’. The European Central Bank is one of the last central banks of the G10—a group of the ten most-traded global currencies—to hike interest rates. Bank of Japan and Swiss National Bank are the others but are experiencing significantly lower inflation. Policy divergence has become more apparent in recent days after the Federal Reserve hiked interest rates by 50 basis points, the Bank of England made its fourth consecutive rate hike, Australia hiked rates by more than expected, and Sweden’s Riksbank made a u-turn and decided to hike rates as well. With a recent annual inflation reading of 7.5%, pressure is building on the ECB ahead of their next meeting on 9th June. (Bloomberg)

‘Xi moves to silence Covid zero critics in sign of brewing tumult’. Chinese officials have defended Xi Jinping’s Covid-Zero strategy, pledging to ‘fight against any speech that distorts, questions or rejects our country’s Covid-control policy’. The warning comes amid growing pressure to relax strict virus curbs to protect economic growth, after China posted a sharp contraction in economic activity in April. White House medical adviser Anthony Fauci said the measures were unlikely to be successful in the long run. (Bloomberg)


Today

US equities slid sharply in yesterday’s session prompting Asia to follow suit overnight and European equity futures to open in the red on Friday morning. US Treasury yields closed higher while European sovereign yields dipped on the open. The trade-weighted US Dollar Index continued its climb while the Sterling equivalent fell to its lowest since December 2020. Oil prices remained steady.

Events

German Industrial Production (Mar): -3.9% (est. -1.3%)
UK Construction Purchasing Managers’ Index (Apr): 9:30AM
US Non-Farm Payrolls: 1:30PM
US Unemployment Rate: 1:30PM​​​​​​​

Interbank rates:
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GBP/USD – 1.2296
GBP/EUR – 1.1718
EUR/USD – 1.0493
USD/CAD – 1.2856

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