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The pessimism grows

Today's news headlines:

'UK Consumer Confidence Hits Record Low as Recession Risks Mount'. With the UK in the midst of the fastest inflation since the 1980s, consumers are the least optimistic on record about their own finances and the broader economy. The likelihood of further industrial action and interest rate hikes through the summer is weighing on the nation's mood, with wages failing to keep up with the pace of price rises. More pain lies ahead with the Bank of England sacrificing economic growth to combat inflation that's expected to peak at 11% come October. (Bloomberg)

'Powell Hammers Home 'Unconditional' Commitment to Cool Prices'. US Democrats have warned Federal Reserve Chair Jerome Powell that he risks triggering a recession in his attempts to restore price stability. Another of Powell's colleagues, Michelle Bowman, has called for a 75bps hike next month, with the labour market running unsustainably hot. Meanwhile, surging prices have infuriated Americans, helping to plummet President Biden's approval levels ahead of November's midterm elections. (Bloomberg)


Market sentiment has improved overnight, with investors scaling back bets on the pace of interest rate hikes in the US. However, a gauge of commodity prices fell to its lowest since February, signalling angst about the economic outlook. UK and European equity futures rose, while both Sterling and the Euro climbed 0.1% against the US Dollar.


UK Gfk Consumer Confidence: -41 vs -40 previously
UK Retail Sales: -0.5% vs 1.4% previously
German ifo Business Climate: 9:00AM
Reserve Bank of Australia Gov Philip Lowe speaks: 12:30PM
US Federal Open Market Committee member James Bullard speaks: 12:30PM
US Revised University of Michigan Consumer Sentiment: 3:00PM

Interbank rates:
GBP/USD – 1.2275
GBP/EUR – 1.1655
EUR/USD – 1.0535
USD/CAD – 1.2975

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