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The Bank of Japan will release a summary of the opinions of the deliberation committee members at its March monetary policy meeting in ten minutes.March 30th - According to the Italian newspaper *La Stampa*, European Central Bank (ECB) Governing Council member and Bank of France Governor Villeroy stated in an interview that the ECB is prepared to take action to curb inflation expectations; however, it is still too early to bet on the timing of an interest rate hike. Villeroy pointed out that the war with Iran could trigger a negative supply shock, dragging down economic growth and accelerating the rise in consumer prices. He emphasized that recent news related to the conflict "has not sent a positive signal." In an interview published on Monday, he stated, "The ECB cannot control oil prices, but it has the responsibility and the ability to anchor household and business inflation expectations to our 2% medium-term inflation target. If necessary, we are prepared to act in this direction."ECB Governing Council member Villeroy: The ECB is ready to act, but it is too early to discuss the date when the ECB may raise interest rates.March 30th - According to CBS News, Jim Sims, the Democratic chairman of the House Intelligence Committee, accused President Trump of making "outright lies" about negotiations with Iran last week amid market turmoil and the ongoing war. "Last Sunday, he realized there was a serious financial crisis in the markets, so he made that up," Sims said in a program interview. Sims added, "The Iranians now realize they have the upper hand. Gasoline prices have risen by more than $1 a gallon. They realize, My God, we have huge leverage."Both WTI and Brent crude oil opened about 1% higher on Monday, currently trading at $102.57 per barrel and $107.15 per barrel, respectively.

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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