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The yield on 30-year UK government bonds hit its highest level since October 21, rising about 6 basis points to 5.257% on the day.S&P: Funding options for Congo remain scarce.On November 5th, the European Council announced that member states had reached an agreement on amending the European Climate Law and formed a position paper. The Council also approved updated EU and member state emissions reduction targets for 2035. According to the document, the Council maintained the European Commissions medium-term climate target—a 90% reduction in net greenhouse gas emissions from 1990 levels by 2040. This position paper will serve as the basis for subsequent trilateral talks between the Council and the European Parliament. The European Parliament will formulate its own position, and the European Commission, the Council, and the European Parliament will consult on the final legislative version. The Council also introduced emissions reduction measures, such as allowing member states to offset up to 5% of their 1990 emissions reduction targets by purchasing international carbon credits from 2036 onwards, and allowing member states to flexibly allocate resources across different sectors and policy tools to address emissions reduction shortfalls in specific areas without affecting overall progress.The U.S. Energy Information Administration (EIA) reported that gasoline inventories in the U.S. Gulf Coast region fell to their lowest level since October 2024 last week.U.S. Energy Information Administration (EIA): Gasoline inventories in the U.S. Midwest fell to a record low last week.

The EUR/GBP exchange rate recovers above 0.8000 in advance of Eurozone inflation and UK gross domestic product

Alina Haynes

Mar 30, 2023 16:05

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The EUR/GBP pair extended its recovery above 0.88 during the Asian trading session. Anticipating that the European Central Bank (ECB) will continue to raise interest rates to combat persistent inflation, the cross has depreciated progressively. Friday will see the publication of preliminary Eurozone Harmonized Index of Consumer Prices (HICP) and Gross Domestic Product (GDP) (Q4) figures. Prior to the publication of these figures, it is anticipated that the asset will exhibit explosive activity.

 

It is anticipated that the preliminary Eurozone HICP will decelerate significantly from 8.5% to 7.3%. While it is anticipated that the core HICP will rise to 5.7% from 5.6% in the previous release. Weak energy prices are anticipated to have a significant impact on Eurozone inflation. In light of Christine Lagarde's prediction that inflation will remain elevated for an extended period of time, the European Central Bank (ECB) is expected to continue tightening monetary policy.

 

In the interim, banking tensions are subsiding as the absence of information regarding additional collateral damage has a positive impact on the market. Chief Economist Philip Lane stated on Wednesday that ECB interest rates must rise if banking tension has no or a "relatively limited" impact.

 

Investors avidly anticipate the United Kingdom's Gross Domestic Product (GDP) data. According to the consensus, the United Kingdom's growth in the fourth quarter of CY2022 remained unchanged. It is anticipated that the annual GDP will remain unchanged at 0.4%. It is expected that the British economy will undergo a severe recession as a result of high inflation and sluggish growth.

 

The Bank of England (BoE) policymakers appear confident that inflation will moderate in the near future and that the unexpected rise in February's inflation was a one-time anomaly; however, the absence of evidence raises doubts. If inflation persists, BoE Governor Andrew Bailey stated that additional rate increases would be announced. In contrast, Bank of America (BoA) analysts anticipate that the Bank of England (BoE) will not increase rates and will maintain current levels until 2024.


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