The latest chapter
Today's news headlines:
'Sunak weighs 5% public-sector pay offer to end waves of strikes'. The windfall £30bn improvement in government finances has injected some flexibility into the NHS pay rise dispute. Jeremy Hunt is weighing a 5% increase for 2023-2024; backdated payments remain on the table for the prior year to augment the meagre 3.5% rise. Hunt has also increased departmental budgets by £6.6bn, which should help alleviate critical issues like the social care limitations, which are reducing hospital beds. (Financial Times)
'Biden vows Russia will "never" prevail in Ukraine'. US President Biden delivered an address in Warsaw in response to Vladimir Putin's televised speech – who had blamed the Russian invasion of Ukraine on US expansionism – rebutting that the conflict is entirely a Russian adventure. Putin had also unilaterally withdrawn from the last remaining Russo-American nuclear arms treaty, so it's clear Biden is aiming to project a defiant, confident tone in the face of aggression. (Financial Times)
The US Dollar Index made some small gains in yesterday's session but has opened flat today. US Yields also appear to have softened, making a slight reversal this morning. Yesterday, the big news was UK PMI data which roundly beat estimates – services showed a meaningful improvement of expectations – and spurred Pound appreciation based on higher-for-longer interest rate expectations. EU PMIs presented a mixed picture of improving services but deteriorating manufacturing outlooks. Overnight, the Reserve Bank of New Zealand hiked rates by 0.5%, which is a slower pace than the 75bps of previous meetings. The main highlight today is the FOMC minutes this evening.
AU Wage Price Index q/q: 0.8% vs 1.1% last quarter
NZ RBNZ Monetary Policy Statement: 4.75% vs 4.25% last meeting
EU German ifo Business Climate: 9:00 AM
US FOMC Meeting Minutes: 7:00 PM
NZ RBNZ Gov Orr speaks: 7:10 PM
GBP/USD – 1.2105
GBP/EUR – 1.1360
EUR/USD – 1.0655
USD/CAD – 1.3550
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*Indicative interbank rates taken on the day of writing. Please speak to your Dealer to find out the current rates available for you.