Today's news headlines: 

‘Fed signals first rate rise will come in 2023’. The Federal Reserve held interest rates at 0.25% yesterday but signalled at least two rate rises are likely in 2023. Central bank Chief Jerome Powell partially addressed inflation concerns acknowledging that it may be higher than predicted but emphasised the central bank has the tools to cope. Core inflation is expected to reach upwards of 3% in the US this year, considerably higher than predictions made back in March. Monetary policy tapering was also mentioned, with Powell restating the need for full employment and 2% inflation. (Financial Times) 

‘CureVac’s mRNA Covid vaccine flunks clinical trial’. The German-based pharmaceutical company posted less-than-encouraging results for its recent Covid vaccine development. Offering just a 47% protection rate makes it one of the most ineffective vaccines that have been trialled so far. News of these results caused the company's US-listed share price to plummet 50% overnight. CureVac still has a number of trial phases left; the pressure is on to ensure the efficacy can be improved. (Financial Times) 

Today's events, rates, and data 

• US markets finished lower yesterday after news that interest rate hikes are likely to come in 2023. The S&P 500 closed 0.54% lower while the Dow Jones fell 0.77%. Cable also fell on the back of this news, settling around the $1.41 level. EUR/USD followed suit pulling back to $1.20 overnight. 

Today's events

Australia Unemployment Rate: 5.1% vs 5.5% last month
Swiss National Bank Monetary Policy Assessment: 8:30AM
Eurozone final CPI y/y: 10:00AM
US Philly Fed Manufacturing Index: 1:30PM
US Unemployment Claims: 1:30PM

Interbank rates

GBP/USD – 1.3984
GBP/EUR – 1.1667
EUR/USD – 1.1987
USD/CAD – 1.2279

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