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May 6th - Bond traders are increasing their bets that the Federal Reserves next policy move will likely be a rate hike rather than a rate cut. Swap contracts linked to central bank interest rate decisions currently show that the market expects a greater than 50% probability of a Fed rate hike before April next year, prior to any rate cut. More and more traders are also increasing their positions to hedge against the risk of a rising probability of a rate hike before the end of the year. This shift in market conditions comes as policymakers appear increasingly divided on the interest rate outlook. Lawrence Gillum, chief fixed income strategist at LPL Financial, believes that the possibility of a rate cut this year still exists, but this probability will gradually decrease as the conflict with Iran continues. He stated, "Theres no doubt that Warshs path forward will be challenging."Lucid Group (LCID.O) executives: Due to geopolitical conflicts, there were some delays in the delivery of equipment to the Saudi factory, but the team has successfully mitigated the situation.According to the UAEs national news agency, the UAE president received phone calls from several leaders, including Israeli Prime Minister Netanyahu, who condemned Irans attack on the UAE and expressed their support for the measures the UAE has taken to maintain security.AMD (AMD.O) shares rose more than 11% in after-hours trading.ChatGPT has announced its availability as a plugin for Excel and Google Sheets. ChatGPT states that it helps analyze messy data, write formulas, update spreadsheets, and explain the steps involved—all without leaving the spreadsheet interface. The service will be powered by GPT-5.5.

The EUR/GBP exchange rate recovers above 0.8000 in advance of Eurozone inflation and UK gross domestic product

Alina Haynes

Mar 30, 2023 16:05

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The EUR/GBP pair extended its recovery above 0.88 during the Asian trading session. Anticipating that the European Central Bank (ECB) will continue to raise interest rates to combat persistent inflation, the cross has depreciated progressively. Friday will see the publication of preliminary Eurozone Harmonized Index of Consumer Prices (HICP) and Gross Domestic Product (GDP) (Q4) figures. Prior to the publication of these figures, it is anticipated that the asset will exhibit explosive activity.

 

It is anticipated that the preliminary Eurozone HICP will decelerate significantly from 8.5% to 7.3%. While it is anticipated that the core HICP will rise to 5.7% from 5.6% in the previous release. Weak energy prices are anticipated to have a significant impact on Eurozone inflation. In light of Christine Lagarde's prediction that inflation will remain elevated for an extended period of time, the European Central Bank (ECB) is expected to continue tightening monetary policy.

 

In the interim, banking tensions are subsiding as the absence of information regarding additional collateral damage has a positive impact on the market. Chief Economist Philip Lane stated on Wednesday that ECB interest rates must rise if banking tension has no or a "relatively limited" impact.

 

Investors avidly anticipate the United Kingdom's Gross Domestic Product (GDP) data. According to the consensus, the United Kingdom's growth in the fourth quarter of CY2022 remained unchanged. It is anticipated that the annual GDP will remain unchanged at 0.4%. It is expected that the British economy will undergo a severe recession as a result of high inflation and sluggish growth.

 

The Bank of England (BoE) policymakers appear confident that inflation will moderate in the near future and that the unexpected rise in February's inflation was a one-time anomaly; however, the absence of evidence raises doubts. If inflation persists, BoE Governor Andrew Bailey stated that additional rate increases would be announced. In contrast, Bank of America (BoA) analysts anticipate that the Bank of England (BoE) will not increase rates and will maintain current levels until 2024.


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