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On June 18th, Suren Thiru of the Institute of Chartered Accountants in England and Wales stated that the Bank of Englands next move is more likely to be a rate cut than a rate hike. After the Bank of England kept interest rates unchanged at 3.75% on Thursday, Thiru indicated that the central bank may enter a longer policy wait-and-see period to assess geopolitical uncertainties and domestic political instability. "British monetary policy is currently at a crossroads," Thiru said. The US-Iran peace agreement has boosted market expectations for easing inflation, but if hostilities resume, "the situation could quickly shift back towards raising interest rates." However, he stated that given the still high level of global volatility, the Bank of England is unlikely to initiate a rate cut before next year.Pfizer shares fell 1.4% in pre-market trading after Chief Financial Officer Dave Denton announced his resignation.Futures Market Summary | Thursday, June 18th, CCTV News Highlights: 1. Xi Jinping replies to Xinhua News Agency veteran Zhang Liansheng, emphasizing the importance of inheriting the red gene and writing an excellent chapter on the new journey. 2. Striving to write a new chapter in Chinese-style modernization under the guidance of Xi Jinpings thought on Party building. 3. The Central Leading Group for Party Building issued a "Notice on Studying and Implementing Xi Jinpings Thought on Party Building." 4. Peoples Daily commentator article: Making a major original contribution to the development of Marxist party building theory—On studying and implementing Xi Jinpings thought on Party building. 5. Han Zheng meets with guests from Canada and Denmark. 6. Accelerating the allocation of funds for "two new" projects to continuously release policy effectiveness. 7. The first report meeting of the series of reports on "Guaranteeing and Improving Peoples Livelihood in High-Quality Development" was held in Beijing. 8. Lin Dan: Serving the residents well for life. 9. The State Council Information Office held a meeting with Chinese and foreign journalists on "Striving for the New Journey." 10. The China Theatre Association, the China Folk Literature and Art Association, and the China Calligraphers Association elected a new leadership. 11. National railway transportation for the Dragon Boat Festival holiday begins today. 12. Market supply is abundant as the Dragon Boat Festival approaches. 13. Two departments urgently allocate 100 million yuan in central natural disaster relief funds. 14. The policy dividends of the six-month island-wide customs closure in the Hainan Free Trade Port continue to be released. 15. The import and export volume of the Western Land-Sea New Corridor reached a record high in the first five months. 16. my countrys first carbon footprint database for key industrial products goes online. 17. The Datengxia Hydropower Project in Guangxi passes completion acceptance. 18. The "National Recruitment Action - Beijing Trip" special event for college graduate employment services is launched. 19. Box office revenue for films in 2026 exceeds 16.5 billion yuan. 20. The 2026 China Brand Forum is held in Xiongan. 21. The official text of the memorandum of understanding signed remotely by the US President and the Iranian President is released. The Pakistani Prime Minister announces that the US-Iran memorandum of understanding takes immediate effect. 22. Russia claims that the Russian military has made significant progress in Donetsk. 23. Palestine strongly condemns Israels settlement expansion. 24. The G7 summit concluded without a joint communiqué. 25. The Federal Reserve announced for the fourth consecutive time this year that it would maintain interest rates unchanged.On June 18th, Emma Mogford of the Premier Miton Monthly Income Fund stated that the Bank of England may not need to raise interest rates this year, following the banks decision to keep rates unchanged at 3.75% on Thursday. "Price increases later this year triggered by the Iran war are likely to be offset by weaker demand. Furthermore, wage growth is expected to be only moderate given the relatively weak labor market." The Bank of England approved the decision with a 7-2 vote, with the two policymakers favoring a 25 basis point rate hike.Mayor of Moscow, Russia: The fire at the oil refinery is basically under control.

Indian rupee pares losses below 78.00 amid rumors of a rate rise by the Reserve Bank of India

Alina Haynes

Jun 07, 2022 14:35

截屏2022-06-07 下午2.30.20.png 

 

During the first hour of Tuesday's Indian trading day, the USD/INR extends its fall from a two-week high and retests daily lows near 77.70.

 

In doing so, the Indian rupee (INR) pair appears to be preparing for the Reserve Bank of India's (RBI) rate rise while paying some attention to the broad US dollar gains and Foreign Portfolio Investors' (FPI) exit from Indian markets. The cause may possibly be related to recent risk-positive news reports from China.

 

Despite this, an eight-year high in Indian inflation has prompted market speculation of a significant rate rise by the RBI at its meeting on Wednesday. "All 47 experts in a Reuters survey predicted that the repo rate will be lifted for a second consecutive month from 4.40 percent to a range of 25 to 75 basis points," said Reuters.

 

The survey continues, "India's bond markets are also anticipating liquidity tightening measures, with many experts projecting a 50 basis point hike in the cash reserve ratio for banks as the RBI strives to restore monetary conditions to pre-crisis levels."

 

In addition, news articles indicating confidence in Asia's leading economy, China, contribute to the INR's strength. China Securities Journal (CSJ) lauded the nation's viral control and policy stimuli while predicting economic growth in the second half of 2022 (H2). Previously, Beijing's ability to overcome the pandemic and citing preparations to recover from the economic loss with faster unlocks, along with US President Joe Biden's likely easy stance for China, as far as demonstrating readiness to remove Trump-era tariffs, appeared to support sentiment and test INR bears.

 

Alternatively, a substantial outflow of foreign cash and rising oil costs, a significant strain on the Indian budget deficit, provide difficulties for USD/INR sellers. Yesterday, foreign investors sold the most Indian government bonds in a single session in a month, according to NewsRise, citing Reuters.

 

In addition, increased speculation over the Fed's faster/heavier rate rises, particularly following Friday's US employment report, drives the USD/INR exchange rate. A robust US Nonfarm Payrolls (NFP) report and the last dose of hawkish Fedspeak before the blackout norm helped US Treasury rates conclude the week on a positive note, reversing a three-week downward trend. According to the most recent data, market participants predict a rate rise of 0.50 percent by the Federal Reserve in September with a probability of 70 percent, up from 30 percent a week earlier.

 

The US Goods and Services Trade Balance for the upcoming month, projected at $-89.5B compared to $-109.8B in prior readings, can excite intraday traders, but the RBI decision on Wednesday and the US Consumer Price Index on Friday will garner the most attention (CPI).

Technical Evaluation

A daily closing above 77.85 looks essential for USD/INR bulls to target the May record high at 78.15. Meanwhile, 77.35 and March's peak around 77.17 restrict the pair's near-term fall.


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