Trust you have had a good weekend and a palatable Monday…
Expecting a rate rise this Thursday which will cement GBP gains we have witnessed over the past 2/3 working days. Suggestions are that we could see a rise to 1.63% this week, which is above the 1.5% that would prevail if the Bank of England lifts the benchmark by 0.25% but below the 1.75% that would stand if the bank moves by a larger 0.5%. My gut suggests that we will end up having the larger of the two increases, pushing GBP higher against the major currencies. It’s the only way to combat the aggressive inflation, with more interest rate rises on the table this year…
At the mercy of Thursday’s interest rate rise above, however even more so by European gas supplies, which are drawn mainly from Russia and are being restricted by Moscow in protest over sanctions relating to its invasion of Ukraine. A complete shutdown of gas supply from Russia to the EU is now looking much more likely and something that is without a doubt now being priced into the EUR.
Reduced supplies have pushed energy prices higher and led the EU to agree to a rationing plan that could further hamper continental economies over the winter, leading to widespread declines for the EUR and a handicap that persisted throughout last week.
Non-farm payrolls this Friday. What is that? First Friday of every month a figure is released to present the number of new jobs created during the previous month, in all non-agricultural businesses. This figure is incredibly prevalent, particularly this month as it will give us a really good grasp on how the US economy is fairing. In line with the UK? Let’s see…
Have a good day, here if you need 😊