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September 1st - Data from the National Association of Home Mortgage Borrowers (NAM) shows that UK house prices rose in August, indicating that housing demand remains resilient despite the economic impact of the ongoing conflict between the US and Iran. The average UK house price rose 0.2% in August to £275,465, reversing a revised 0.1% decline in the previous month. Augusts price performance was slightly better than economists expectations of a 0.1% increase. This data suggests that the UK housing market may be weathering the impact of the Middle East conflict. Ample household savings and Prime Minister Andy Burnhams cost-of-living measures are helping to maintain housing demand. However, energy costs remain high, and house prices have fallen in two of the past four months. Overall economic sentiment in the UK may deteriorate further. The Iranian energy shock has dampened market hopes for interest rate cuts, with traders now expecting the Bank of England to raise rates by 25 basis points by the end of the year. Meanwhile, speculation surrounding potential tax increases in the new Chancellor of the Exchequer John Healys first budget could further dampen the willingness of potential homebuyers.The UKs Nationwide house price index rose 0.2% month-on-month in August, below the expected 0.10% and the previous reading revised from 0.10% to -0.1%.The UKs Nationwide house price index rose 1.6% year-on-year in August, below the expected 2% and the previous reading revised from 1.80% to 1.4%.Germanys real retail sales fell 3.4% month-on-month in July, compared with an expected 0.4% and a previous reading of -0.7%.Germanys real retail sales fell 2.5% year-on-year in July, compared with a previous reading of -0.2%.

USD/CHF Consolidates in a Range of 0.9320-0.9350 on Expectations of Rate Reversion to Neutral

Drake Hampton

Apr 08, 2022 09:57

Tips

  • USD/CHF remained stuck around 0.9350 despite a big increase in US Treasury yields.

  • The DXY is aiming for 100.00 as traders increase their expectations for an aggressive rate hike.

  • Russia resigns from the United Nations Human Rights Council.

 

Since Thursday, the USD/CHF pair has been swinging within a narrow band of 0.9318-0.9348 as Federal Reserve (Fed) policymakers have begun prescribing a reversion to neutral rates from ultra-loose monetary policy postures.

 

After commenting on the amount to which the Fed will raise interest rates in future monetary policies, members of the Fed's Monetary Policy Committee (MPC) have changed their focus to calling for a return to neutral policy. The ultra-loose monetary policies and helicopter money used to boost growth following the Covid-19 outbreak have served their purpose, and it would be preferable to return to normal rates and a self-sufficient economy. Atlanta Fed President Raphael Bostic stated on Thursday that while it is quite acceptable for the Fed to move policy closer to neutral, it should go cautiously, according to Reuters.

 

On the Russia-Ukraine front, Russia is expelled from the United Nations (UN) Human Rights Council after its members voted against the Kremlin's war crimes in Bucha, Ukraine. Additionally, US lawmakers have decided to prohibit Moscow from importing oil, gas, and coal. Additionally, the former has opted to revoke its 'Most Favored Nation' trade designation, resulting in higher tariffs for Moscow.

 

Meanwhile, the US dollar index is heading towards the enchanted level of 100.00, fueled by forecasts for better US Consumer Price Index (CPI) data next week. The yield on the 10-year US Treasury note has recaptured a three-year high of 2.66 percent as rate rise worries resurface.

USD/CHF

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