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On August 18th, the Ministry of Commerce and eight other departments issued an opinion on further stimulating the vitality of lower-tier markets and boosting consumption in county-level areas. The opinion mentions improving the quality and efficiency of financial services. It guides financial institutions to optimize financial services for the consumption sector in lower-tier markets and strengthens financial support for eligible consumer commercial facilities projects. It supports eligible wholesale, retail, and service enterprises in issuing bonds and listing on the stock exchange. Eligible commercial and trade enterprises that open new chain stores in county-level areas can apply for entrepreneurial guaranteed loans and receive interest subsidies.On August 18th, nine departments, including the Ministry of Commerce, issued an opinion on further stimulating the vitality of lower-tier markets and boosting consumption in county-level areas. The opinion mentions expanding the supply of high-quality, reasonably priced goods. It encourages enterprises to actively introduce high-quality products into county-level markets, simultaneously launching new products in eligible counties, and promoting the sharing of the same quality and products between urban and rural areas. It guides enterprises to develop high-quality products that meet the consumption characteristics of county-level areas and supports commercial and trade enterprises in building flexible supply chains based on "own brands + demand-driven production." It also strongly supports the promotion of new energy vehicles, green and intelligent products, and green building materials in rural areas, and expands the coverage of rural charging facilities.With no substantial progress in the Middle East situation, will crude oil prices continue their slightly bullish trend in the short term? A quick overview of the pre-market crude oil prices (converted between domestic and international markets) in one chart.On August 18th, nine departments, including the Ministry of Commerce, issued an opinion on further stimulating the vitality of lower-tier markets and boosting consumption in county-level areas. The opinion mentions developing emerging business models tailored to local conditions. It encourages qualified regions to develop virtual reality, immersive experiences, and "artificial intelligence + consumption," and promotes green consumption models such as secondhand trading and commodity leasing. It also calls for deepening the implementation of a special action to promote healthy consumption and innovating consumption chains that integrate primary, secondary, and tertiary industries.Weak US consumer data led to a slight rebound in precious metals. A quick chart shows the pre-market prices of gold and silver, converted between domestic and international markets.

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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