EUR/USD 1.16310
0.116%
Gold 4104.17
-0.529%
Oil 61.316
-0.437%
USD/JPY 152.823
0.153%
GBP/USD 1.33113
-0.101%
GBP/JPY 203.431
0.060%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
On October 25th, Bank of France Governor François Villeroy de Villeroy warned lawmakers debating the 2026 budget that the deficit must not exceed 4.8% of economic output to ensure France can cope with its growing debt burden. The French National Assembly is currently debating a draft budget that targets 4.7% GDP growth, but Prime Minister Jean-Claude Le Cornu has said the ultimate target should be within 5%, and he is seeking a compromise with opposition lawmakers. "It is absolutely necessary to keep the deficit below 3% between now and 2029, which would imply a maximum deficit of 4.8% next year," Villeroy de Villeroy said in an interview with La Croix. He also stated that France faces the risk of "progressive suffocation" from debt and that additional deficit spending will fail to stimulate economic growth. According to calculations by the Bank of France, if debt uncertainty is reduced, a 1% reduction in the household savings rate would boost economic growth by 0.4%. However, Villeroy de Villeroy stated that the French economy has strong momentum this year and growth will be "at least" as strong as the Banks forecast of 0.7%.On October 25th, the U.S. federal government shutdown entered its 24th day. More and more federal employees forced to take unpaid leave are facing the dilemma of not being able to pay their bills or mortgages, and many are forced to queue up at food banks for assistance. Jacobs, president of the local CDC union, stated that both parties are using the livelihoods of federal employees as bargaining chips in political negotiations, and that the current chaotic situation is unprecedented.On October 25, Lizhong Group responded to investors on an interactive platform, saying that the second phase of the companys project to produce 3.6 million ultra-lightweight aluminum alloy wheels annually in Mexico, with an output of 1.8 million wheels, has now been put into initial production. The company is actively promoting the running-in of the production line and the release of production capacity, striving to achieve the goal of full production and sales as soon as possible.According to news on October 25, from January to September this year, the cumulative transaction volume of new houses in Foshan was 23,611 units and 2.8425 million square meters, which was lower than the transaction volume in the same period last year; but the cumulative transaction volume of second-hand houses was 40,990 units and 5.008 million square meters, an increase of 3.3% and 4.3% year-on-year respectively.On October 25, Russian Presidents Special Representative Kirill Dmitriev said during his visit to the United States on the 24th that he believed that all parties were "very close" to reaching a diplomatic solution to the Ukrainian issue, and Russia was open to Ukraine obtaining third-party "security guarantees" in the future.

GBP/USD fell to levels not seen in two years due to recession fears and pre-NFP instability

Alina Haynes

Sep 02, 2022 14:44

 截屏2022-09-02 上午10.05.09.png

 

The U.S. labor market report for August is the most crucial report of the month. After hitting a two-year low the day before, the British pound stabilized in the 1.1540-1.1550 region throughout Friday's Asian session. Despite impending recessionary fears in the UK, the Cable pair typifies the typical pre-NFP fluctuations.

 

As Bloomberg reports, "the United Kingdom is already in a recession, and inflation is likely to reach 14% later this year," citing BCC data. Unless the next prime minister takes "urgent" action to decrease skyrocketing energy bills, a coalition of groups called "End Fuel Poverty" has warned that the number of UK families in fuel poverty would more than double in January, to at least 12 million.

 

British Foreign Minister and potential future Prime Minister Liz Truss recently stated in a late Wednesday Sun article that she will provide "immediate support" to ensure that households do not incur excessive heating costs this winter.

 

In addition to high US Treasury yields, improved US data and hawkish Fed predictions acted as a drag on the GBP/USD exchange market.

 

President of the Atlanta Fed, Raphael Bostic, meanwhile, has said that the Fed still has a "long way" to go before inflation reaches 2%. As other conservative US central bankers have said, "Restoring price stability is our top aim," so has Lory Logan, the recently appointed president of the Dallas Fed.

 

The statistics for August showed that the US ISM Manufacturing PMI came in at 52.8, beating market expectations of 52.0. As a plus, the final S&P Manufacturing PMI index for August was 51.5, up from 52.2 in July and above the consensus estimate of 51. Similarly, the number of initial claims for unemployment insurance in the United States fell to 232k from 248k in the prior week and 237k the week before that. In addition, during the second quarter (Q2), Unit Labor Cost climbed by 10.2% QoQ, which was somewhat higher than the predicted growth of 10.7%; nevertheless, Labor Productivity fell by 4.1% QoQ, which was lower than the expected decline of 4.5% and the decrease of -4.7% in the first quarter.

 

Despite a mixed day on Wall Street, 10-year US Treasury rates rose to their highest levels since late June. And most significantly, the two-year equivalent hit a 15-year high. The CME's FedWatch Tool now predicts a 72% chance of a rate hike of 75 basis points in September, up from about 69% previously.

 

On the other hand, the Bank of England's (BOE) Decision Maker Panel survey of CFOs showed on Thursday that British companies' expectations for CPI inflation rose in August. Also, as reported by Reuters, a monthly survey by Citi and YouGov revealed on Wednesday that British people' expectations for average inflation over the next five to ten years skyrocketed to a record-high 4.8% in August, well over the Bank of England's inflation aim of 2%.

 

Expectations for August's Nonfarm Payrolls (NFP) and Unemployment Rate reports have dropped from 528K and 3.5%, respectively, to 300K and 3.5%, which is likely to cause worry in the markets. If the jobs report shows improved numbers, the possibility of future US dollar strength cannot be ruled out.

Suggestion