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August 3 - The China Earthquake Networks Center officially measured a 3.3-magnitude earthquake at 03:29 on August 3 in Gao County, Yibin City, Sichuan Province (28.55 degrees north latitude, 104.67 degrees east longitude), with a focal depth of 5 kilometers.August 3rd - According to the Financial Times, British pharmaceutical giant AstraZeneca has been exploring a merger with its US rival Bristol-Myers Squibb, which would create one of the worlds largest pharmaceutical groups with a market capitalization of nearly $400 billion. Sources familiar with the matter revealed that the two companies have been in talks regarding the merger for several months, and negotiations may reach an agreement soon, but there is also a possibility of delays or a breakdown. AstraZeneca is the UKs second-largest listed company by market capitalization, at approximately £196 billion, while Bristol-Myers Squibb has a market capitalization of approximately $133 billion. If the deal is completed, it will be one of the largest corporate mergers and acquisitions in history. This transaction would further accelerate the British pharmaceutical giants strategic shift towards the US market.August 3rd - Sources familiar with the matter revealed that Italian company Prysmian is in advanced talks to acquire US electrical manufacturer Atkore. Prysmian is finalizing preparations for an all-cash acquisition, which could be announced in the coming days. Sources indicated that despite the advanced stage of negotiations, the deal could still be delayed or ultimately fall through. Atkores stock has risen approximately 15% this year in New York, with a market capitalization of around $2.5 billion. Prysmians stock has risen more than a third this year, with a market capitalization of approximately €36.3 billion (about $41.8 billion).The Saudi Arabian and Iranian foreign ministers spoke by phone to discuss diplomatic efforts to de-escalate tensions.The China Earthquake Networks Center automatically determined that an earthquake of approximately magnitude 4.9 occurred near Gao County, Yibin City, Sichuan Province (28.55°N, 104.67°E) at 02:21 on August 3. The final result is subject to the official rapid report.

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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