EUR/USD
1.14828
0.270%
Gold
4541.89
-5.738%
Oil
95.720
-3.178%
USD/JPY
159.004
-0.532%
GBP/USD
1.32976
0.311%
GBP/JPY
211.443
-0.162%
Real-time News
On March 19th, Suren Thiru, an economist at the Institute of Chartered Accountants, stated that Bank of England policymakers should proceed cautiously and avoid raising interest rates too quickly in an attempt to correct past mistakes. Following the surge in energy prices caused by the Middle East conflict, the Bank of England unanimously voted to maintain interest rates. While the Bank of England hopes to avoid repeating the mistake of raising rates too late in 2022, this policy is more restrictive and inflation is lower, putting policymakers in a favorable position to address the current crisis. If the war in Iran ends quickly and soaring oil and gas prices lead to a significant increase in impending inflation, the possibility of another rate cut remains. However, the likelihood of further policy easing this year is rapidly decreasing.U.S. Interior Secretary: Jones Act waivers will help lower prices.March 19th - US Treasury prices fell, and traders no longer viewed the possibility of a US interest rate cut this year after the Bank of England indicated it was prepared to take action to combat inflation. This move led to a rise in yields across all maturities, with the yield on the two-year US Treasury note, most sensitive to changes in Federal Reserve policy, rising 13 basis points to 3.9%. Bond traders withdrew their expectations for a US rate cut this year, and some even began hedging for potential rate hikes in the coming months. Tom de Galloma, managing director of Mischel Financial Group, said, "This is all driven by the Bank of Englands rate decision, as the market now expects a 50 basis point rate hike by the bank in 2026. The European bond market is falling sharply, which is also pushing up US yields." He pointed out that fund flows were determined by a lack of buyers, "mainly selling," and market sentiment was primarily influenced by expectations of a prolonged conflict. "Currently, its believed that this war with Iran could last for months, not weeks."March 19th - Last week, initial jobless claims in the United States unexpectedly declined, indicating a stable labor market and a rebound in job growth in March. The U.S. Labor Department reported on Thursday that initial jobless claims fell by 8,000 to a seasonally adjusted 205,000 for the week ending March 14th (market expectations were 215,000), the lowest level since January of last year, further demonstrating limited layoffs. The U.S. government introduced new seasonality factors for 2026 and revised the seasonality factors for 2021-2025. The application data for 2021-2025 was also revised. While businesses were reluctant to increase staff due to uncertainty surrounding Trumps large-scale tariffs, layoffs remained low. Economists stated that the Trump administrations tightening immigration policies have reduced the labor supply, which has also hampered job growth.On March 19th, traders sold off UK government bonds after Bank of England officials stated they were prepared to "take action" to address any potential inflation spikes caused by the Middle East conflict. The yield on two-year bonds rose by more than 30 basis points to 4.41%. Simultaneously, traders increased their bets on a Bank of England rate hike. The swap market now expects the bank to raise rates by nearly 70 basis points by the end of the year, implying approximately three 25-basis-point hikes, with the first expected next month. In its latest interest rate decision, all nine members of the Monetary Policy Committee unanimously voted to keep the interest rate unchanged at 3.75%, with Governor Bailey warning that policy must "address the risk of a more lasting impact on UK CPI inflation." This represents a dramatic shift in expectations. Less than three weeks ago, given the weak labor market, market confidence was high that the Bank of England would cut rates today.
