Gentium FX | Daily Report - 28th November 2022 - Market Awaits December Interest Rate Hikes
GBP: Sterling rose in what was a buoyant market for risky assets and a hostile environment for the U.S. Dollar last week. Sterling trading conditions seem to have settled down somewhat today even as recession expectations solidify. The UK economic calendar is light this week and there are very few Bank of England speakers. The market currently prices a 50bp Bank of England rate hike on 15th December.
EUR: In Europe, the highlight of the Eurozone data calendar this week will be November price data -released for Germany tomorrow and for the Eurozone on Wednesday. If inflation falls back it could allow the European Central Bank to potentially soften its hawkish rhetoric. Currently a 62 bp hike is priced in for 15th December. Today, President Christine Lagarde will deliver an introductory statement at a hearing before the Committee on Economic and Monetary Affairs (ECON) of the European Parliament in Brussels.
USD: The new trading week starts with a souring market mood as investors move away from risk-sensitive assets with China reporting record-high coronavirus cases for the fifth straight day leading to enforced lockdowns. The greenback is holding ground following last week's bumpy ride and US stock index futures trade in negative territory in the European morning. The Federal Reserve Bank of Dallas' Texas Manufacturing Survey will be published later in the session. The US calendar picks up this week with readings on house prices, confidence, PCE inflation and Friday's release of the November jobs report.
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