Market Insights 110423
The European economic calendar features Sentix investor confidence and retail sales data for the Eurozone?today. The fibre is currently trading at 1.0882 as investors remain cautious ahead of Wednesday’s US inflation data.
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Latest data indicate that China’s economic rebound remained uneven in March. A strong recovery is being noted in the services sector while the manufacturing sector is currently in a downturn due to a lingering weak export. Consumer inflation data hit the lowest mark in March, since September 2021 with a CPI of 0.7% year-on-year for March down from 1.0% in February this year. This disinflation is paving the way for an easing of monetary policy. The target for consumer prices has been fixed to 3.0% for 2023 and the price level for 2022 stands at 2.0%.
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President Biden is currently visiting Ireland to mark the 25th?anniversary of the Good Friday agreement. Yesterday, New York Fed President, John Williams, argued that the greenback remains the staple currency at the heart of the global financial system and also dismissed the claim that the Fed’s tightening strategy is responsible for the failure of 2 banks in the US. He stated that the Fed should maintain its hiking pattern and that inflation would accordingly reach the 2% target in 2025. However, a recent survey by the New York Fed reveals that consumers are beginning to feel the heat of an incoming credit crunch as respondents to the survey overall felt that it is hard to access credit compared to last year. These results indeed support the idea that hiking interest rates will make it more difficult for consumers to obtain liquidity. Various Fed officials are due to make public appearances namely Kashkari from Minneapolis, Goolsbee from the Chicago Fed and Harker from Philadelphia Fed and it would be interesting to hear their takes on the Fed next interest rate decision at the beginning of May. NFIB business optimism index and the Redbook index.?The US dollar is currently trading at 102.22 against other majors.
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