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May 21 – A survey released on Thursday showed that UK factory orders saw their biggest drop since September 2020 this month, while sales price expectations also rose sharply. This situation highlights the predicament facing the Bank of England. Data from the Confederation of British Industry (CBI) showed that the UK industrial orders balance in May was -41, the lowest since September 2020; while the industrial price expectations balance was 38, the highest since February 2023. Cameron Martin, senior economist at the CBI, said that in an increasingly uncertain global environment, the Middle East conflict is causing energy costs to rise and triggering further supply chain disruptions, posing new challenges to manufacturers already facing weak demand. The Bank of England is currently closely monitoring the situation to determine whether it needs to raise interest rates to eliminate inflationary pressures caused by the energy price shock triggered by the war with Iran, or whether the decline in demand means that any rise in the overall inflation rate is only temporary.The UKs CBI industrial orders balance fell to -41 in May, the lowest level since September 2020. Meanwhile, the UKs CBI industrial price expectations balance rose to 38 in May, the highest level since February 2023.The UKs CBI industrial price expectations balance for May was 38, compared to 32 in the previous month.The UKs May CBI industrial orders balance was -41, compared to an expected -40 and a previous reading of -38.Iranian Foreign Minister Araqchi: If it is necessary for us to be present in the fields of diplomacy, dialogue and negotiation for the benefit of the regime, we will be there with the same strength as the armed forces are in defending the country.

USD/CHF Consolidates Around 0.9040 As Attention Shifts To US Inflation

Daniel Rogers

Apr 10, 2023 14:27

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The USD/CHF pair continues to trade lacklusterly above the crucial support level of 0.9036 in the early Tokyo session. Investors are shifting their focus to Wednesday's release of United States Consumer Price Index (CPI) data, making it difficult for the Swiss Franc to gain traction.

 

As tensions between China and Taiwan escalate, S&P500 futures have pared some of their gains. The market's anxiety has been alleviated by the increasing intensity of Chinese military exercises around Taiwan Island. In addition, concerns of a recession are likely to cause volatility in US equities.

 

Jamie Dimon, CEO of JPMorgan Chase, stated in an interview with CNN that the recent banking turmoil caused by the dissolution of Silicon Valley Bank (SVB) and Signature Bank has increased the likelihood of a recession in the United States.  Despite the robustness and security of the banking system, the recent turmoil in the financial system is "another weight on the scale" toward recession, he added.

 

The US Dollar Index (DXY) is protecting the 102.00 support level ahead of US Consumer Price Index (CPI) data. According to the consensus, headline inflation will fall from 6.0% to 5.2%. In addition, the headline monthly CPI would decelerate to 0.3% from 0.4% previously reported. As a consequence of oil prices remaining low in March, inflationary pressures are anticipated to become evident.

 

In contrast, the core CPI, which excludes crude and food prices, is anticipated to increase to 5.6% from 5.5%. The tenacity of inflationary pressures is maintained by the resiliency of demand for essential products, as a result of a higher labor cost index. A similar event could compel the Federal Reserve (Fed) to raise rates again at its May monetary policy meeting.

 

Regarding the Swiss Franc, Swiss markets are suspended on Easter Monday. This week, the Producer Price Index (PPI) data will have an impact on the Swiss Franc.

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