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On August 2, Russias First Deputy Permanent Representative to the United Nations, Konstantin Polyansky, stated at a Security Council meeting that UN staff were unwilling to take seriously the Ukrainian militarys attack on Russian civilian facilities, which undermined the UNs authority. He said: "In this case, the relevant staff of the UN Secretariat acted with extreme hypocrisy, feigning ignorance and evading responsibility by claiming they could not verify the authenticity of the information about Ukrainian crimes. All of this clearly undermined the authority of our global organization."On August 2nd, a full year since the Bank of England began its interest rate-cutting cycle, despite four consecutive rate cuts and the likelihood of further cuts, British households continue to face the highest borrowing costs in a generation. Analysis of Bank of England savings and mortgage data shows that Britons are spending £11 billion (US$14.5 billion) less annually than in July of last year. This loss stems primarily from two factors: First, the rate cuts have hit savers hard, significantly reducing the returns on their savings. Second, many homeowners have yet to benefit from the rate cuts, as they are still waiting for mortgages locked in during periods of high interest rates to expire. Edward Allenby, an economist at Oxford Economics, said: "Against the backdrop of slowing real wage growth and tighter fiscal policy, the lagged impact of past rate hikes on mortgage holders will continue to dampen consumption. The Bank of Englands rate-cutting cycle is unlikely to provide a significant boost to business investment and consumer spending over the next few years."DeepBlue Auto: Global deliveries of 27,169 vehicles in July, a year-on-year increase of 62%.On August 2, CNN reported that the United States plans to conduct the first large-scale test of its Golden Dome missile defense system before the 2028 presidential election, allowing the current administration to promote it as a political achievement during the campaign. The report indicated that the test is tentatively scheduled for the fourth quarter of 2028. An unnamed US Department of Defense official stated that this timeline indicates that Republicans want to have a demonstration to show during the November election. He also noted that completing the systems test preparations within such a tight timeframe is an "extremely challenging task," especially given the high technical complexity of deploying a new missile interceptor system. This test may only be the first phase of the Golden Dome project, and full deployment will take much longer.YouGov poll: Most Americans believe tariffs hurt American consumers; only 22% blame foreign manufacturers.

EUR/GBP is anticipated to decline below 0.8730 as BoE-ECB policy divergence widens

Daniel Rogers

Mar 21, 2023 14:09

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The EUR/GBP pair fluctuates erratically within a 0.8730-point range during the Asian session. The cross aims to fall below the aforementioned support as the market anticipates higher rates from the Bank of England (BoE) despite credible indicators of banking turmoil.

 

The failure of three midsize United States commercial banks and the 164-year-old Credit Suisse has jolted the confidence of market participants. Two schools of thought have perplexed investors, with one believing that central banks could maintain a constant approach to interest rates despite the possibility of significant repercussions from the banking shakeup. Others believe that inflation is extremely persistent, especially in the United Kingdom region, and must be brought under control as soon as possible.

 

In order to maintain pressure on UK inflation, the market expects BoE Governor Andrew Bailey to announce a 25 basis point (bps) reduction in interest rates. This would result in 4.25 percent interest rates.

 

Prior to the Bank of England's interest rate decision, inflation data for the United Kingdom will be diligently monitored. The annual headline CPI is expected to decline from 10.1% to 9.8%, according to projections. At 5.8%, the core CPI, which excludes the cost of fuels and food, would not change.

 

Christine Lagarde's remarks on inflation projections and earnings bolstered expectations for the European Central Bank's (ECB) sustained rate hikes in the Eurozone. ECB According to Reuters, Lagarde stated that it is anticipated that inflation will remain excessively elevated for too long. She added that as a consequence of robust labor markets, wage pressures have increased and workers are endeavoring to regain some of their purchasing power.

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