Weekly Report 14.03.2022 & World News - WillU FX

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    Weekly Report 14.03.2022 & World News

    GBP

    Sterling had another poor week last week, closing in the red for the third week in a row, as the pound’s precipitous fall towards the 1.30 mark continued, with cable printing new lows since November 2020 in the process.

    The move came amid another wave of broad risk aversion across financial markets, as investors continue to monitor the situation in Ukraine, once more denting the attraction of higher-beta currencies such as the GBP.

    This week, domestically, the BoE’s latest policy decision highlights the calendar, with policymakers set to vote in favour of another 25bps rate increase, the third rate hike in as many meetings

    Besides monetary policy, this week’s calendar is rather on the light side, leaving geopolitical developments the main highlight once more.

    USD

    As mentioned above, investors showed a significant desire for safety and shelter last week, amid escalating clashes in Ukraine, sparking a fifth straight week of dollar gains, as the DXY inches ever closer to the psychologically important 100 handle; USD gains were most notable against higher-yielding currencies.

    This week, all eyes will be on Wednesday’s FOMC meeting, with the Fed set to announce a 25bps rate hike, while indicating that as many as five further such hikes could come over the remainder of this year.

    EUR

    In a similar manner to the pound, the common currency found itself out of favour last week, testing $1.09 once more, as investors flooded into the USD and other safe-havens.

    The euro’s failure to rally was interesting because it came at the same time as one of the most hawkish ECB decisions in recent memory, with net asset purchases to end in Q3, and a rate hike likely before the end of this year.

    Looking ahead, a quiet week awaits, with no major scheduled economic events due in the eurozone.

     

    Date Region Release Previous Consensus
    Monday 14th March EU Eurogroup Meetings
    Tuesday 15th March AUD Monetary Policy Meeting Minutes
    Tuesday 15th March EU ZEW Economic Sentiment 48.6 10.3
    Tuesday 15th March US PPI m/m 1.00% 1.00%
    Wednesday 16th March CAD CPI m/m 0.90% 0.90%
    Wednesday 16th March US Retail Sales m/m 3.80% 0.40%
    Wednesday 16th March US Federal Reserve Interest Rate Decision <0.25% <0.5%
    Wednesday 16th March NZD GDP q/q -3.70% 3.20%
    Thursday 17th March AUD Unemployment Rate 4.20% 4.10%
    Thursday 17th March UK Bank of England Interest Rate Decision 0.50% 0.75%
    Friday 18th March CAD Retail Sales m/m -1.80% 2.40%

     

     

    WORLD NEWS

    A selloff in Chinese tech stocks continued today, as China’s close relationship with Russia raised concerns for businesses. We experienced a near 9% drop, as US futures rose with China placing over 15 million residents in the southern city of Shenzhen into lockdown, which is a huge technology hub for the country.

    A likelihood of another recession in the UK is rising, with inflation expecting to exceed 8% by the autumn as a knock-on effect of the Ukrainian conflict. A London based group called Resolution Foundation published a report today which showed poorer households are expecting to pay more than 10% for food and energy with an income drop of 4%. The group called on the UK chancellor, Rishi Sunak to raise state benefits 8% instead of 3.1% from April to help ease the pain of increased prices on poorer households.

    Share Index Prev. Close Open
    FTSE100 7155.64 7155.64
    DAX 13628.11 13827.22
    CAC40 6260.25 6298.96

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