Tackling the issue

Today's news headlines:

‘China’s Economy Shows Mixed Recovery With Consumers Under Strain’. Despite easing Covid restrictions and returning the nation to production, regular virus testing has continued constricting consumer activity in China. Industrial output rose 0.7% in May, with strong prints for aluminium and steel production. However, many businesses are yet to return to full operational levels. Meanwhile, the property sector continued its struggle, with home sales down 41.7% and consumers preferring to add to their savings rather than hit the shops. In an interview with Bloomberg, Morgan Stanley’s Chief China Economist commented that ‘growth had bottomed, the recovery just started’. (Bloomberg)

‘ECB Council Holds Emergency Meeting to Tackle Market Selloff’. The European Central Bank’s governing council are expected to discuss current market conditions in today’s ad-hoc meeting. This comes after a recent rise in bond yields signalled that investors aren’t convinced that the central bank can raise borrowing costs without intervening in the European government bond market to keep yields down. The Euro strengthened against the US Dollar in response, while Italian bonds surged. (Bloomberg)


Today

The US Dollar rallied yesterday, strengthening across the board, with the consensus growing that the US Central Bank will raise interest rates by 75bps in the steepest tightening since 1994. Meanwhile, US and European stock futures rose ahead of the Fed decision, in a small recovery from one of the worst sell-offs in decades.

Events

China Industrial Production y/y: 0.7% vs -2.9% previously
China Retail Sales y/y: -6.7% vs -11.1% previously
US Retail and Core Retail Sales m/m: 1:30PM
US Empire State Manufacturing Index: 1:30PM
EU European Central Bank President Christine Lagarde Speaks: 5:20PM
US Federal Open Market Committee Statement & Federal Funds Rate: 7:00PM
US FOMC Economic Predictions: 7:00PM
US FOMC Press Conference: 7:30PM

Interbank rates:
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GBP/USD— 1.2015
GBP/EUR— 1.1470
EUR/USD— 1.0475
USD/CAD— 1.2960

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