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April 18 - According to the Wall Street Journal, US officials stated that the US military is preparing to board and seize Iranian-linked oil tankers and merchant ships in international waters in the coming days, expanding its naval operations beyond the Middle East. This plan comes as the Iranian military continues to tighten its control over the Strait of Hormuz, attacking several merchant ships on Saturday and declaring the waterway under "strict Iranian control." These developments have caught shipping companies off guard, just a day after the Iranian Foreign Minister declared the strait fully open to merchant ships, a statement praised by President Trump.Domestic News: 1. Two Chinese citizens tragically died in a car accident in the Russian Far East. 2. The Eastern Theater Command conducted joint combat readiness patrols in relevant sea and air areas of the East China Sea. 3. Rumors circulating online that "new environmental regulations have increased chicken farming costs, leading to higher egg prices" are false. 4. The 27th meeting of the China-Switzerland Joint Economic and Trade Committee was held in Bern, Switzerland. 5. Eight departments, including the Ministry of Public Security, stated that they will maintain a high-pressure stance against tax-related crimes such as issuing false invoices and tax evasion. 6. Seven e-commerce platforms expressed their sincere acceptance of the State Administration for Market Regulations penalties and their determination to fulfill their food safety responsibilities. 7. DeepSeek is reportedly launching its first external financing round? An executive from a large state-owned equity institution stated that the news is likely true, but they are currently unable to invest. International News: 1. The US Department of Energy will release the third batch of strategic petroleum reserves. 2. Progress has been made in a new round of dialogue between the Congolese government and anti-government forces. 3. Iraq stated that oil exports from all its oil fields will resume within days. 4. ECB Governing Council member Demarco stated that the ECB is not in a hurry to act and will receive more information in June. 5. According to the Wall Street Journal: The U.S. Department of Justice informed French law enforcement that it will not assist them in investigating Elon Musks social media platform X. 6. Iran Situation—① Iran: Due to the U.S. "breach of promise," it will control passage through the Strait of Hormuz until the war is completely over. ② Iran stated that it has not yet agreed to hold the next round of negotiations with the U.S. ③ Trump: The U.S. and Iran are in dialogue, and there will be news before the end of today. Iran cannot blackmail us by closing the strait again. ④ In contact with maritime intelligence: The Iranian Revolutionary Guard fired on oil tankers attempting to cross the Strait of Hormuz. ⑤ According to the Wall Street Journal: U.S. officials said that the U.S. military is prepared to board and seize ships linked to Iran in international waters in the coming days.According to the Wall Street Journal, U.S. officials say the U.S. military is prepared to board and seize Iranian-linked vessels and merchant ships in international waters in the coming days.On April 18, the Security Service of Ukraine (SBU) announced on social media that it had struck three Russian warships in Crimea. The SBU stated that the struck warships included the Russian Navys large landing ships "Yamal" and "Azov," as well as a warship of unidentified type. Other reports indicated that a Russian Project 21980 anti-sabotage boat "may have been hit."On April 18, Naghdi, an advisor to the commander-in-chief of Irans Islamic Revolutionary Guard Corps, said in an interview that Irans missile and drone production is still ongoing.

GBP/USD falls to around 1.2370 as the BoE considers taking swift action ahead of UK inflation and US purchasing managers' indices

Alina Haynes

Apr 17, 2023 13:53

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On Monday morning, the GBP/USD currency pair retested an intraday low of 1.2390 after extending Sunday's decline from a 10-month high. To provoke adverse after breaking a four-week uptrend, the Cable pair explains the most recent concerns emanating from the United Kingdom (UK) and the optimism surrounding the Federal Reserve (Fed).

 

According to the Financial Times (FT), "The Bank of England is considering a major overhaul of its deposit guarantee scheme, including increasing the amount covered for businesses and compelling banks to pre-fund the system to a greater extent to ensure faster access to cash when a lender collapses."  The revelation fuels banking concerns in the United Kingdom and places pressure on the Cable duo.

 

UK Chancellor Jeremy Hunt's concerns about US subsidies may also be exerting downward pressure on the GBP/USD exchange rate as British firms rush to claim benefits before leaving the country. According to the news, "Chancellor Jeremy Hunt warned Sky News that Britain should be wary of any new subsidies, warning that they could undermine the economy and possibly even spark a protectionist trade war."

 

A larger-than-expected decline in US retail sales was unable to offset positive data from US industrial production and the University of Michigan's (UoM) consumer confidence index from the previous day. Despite this, US retail sales decreased by 1.0% in March compared to the predicted -0.4% decline and February's -0.2% decline. As opposed to the 0.2% market consensus and previous reading, Industrial Production increased by 0.4% in the month in question. The preliminary result of the University of Michigan's (UoM) Consumer Confidence Index for April, which increased to 63.5 from 62.0 analysts' expectations and previous readings, was also encouraging. In addition, inflation forecasts for the next year increased from 3.6% in March to 4.6% in April, while inflation forecasts for the next five years decreased by 2.9% during the same month.

 

Notably, Fed officials have recently appeared more hawkish than their BoE counterparts, which has exerted additional pressure on the GBP/USD exchange rate.

 

In this environment, the S&P 500 Futures exhibit modest gains following Wall Street's pessimistic close, while bond yields remain unchanged following weekly increases.

 

Moving forward, the current week is crucial for GBP/USD speculators as it contains a variety of high-quality inflation, employment, and UK PMI data. These data may be used to support the Bank of England's (BoE) officials' waning hawkish inclination and may keep bears in play. However, the US PMIs and Fed discussions should not be disregarded when looking for clear guidelines.

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