Weekly Report 21.02.2022 & World News - WillU FX

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    Weekly Report 21.02.2022 & World News

    GBP

    Sterling just about ended last week in positive territory, notching a third straight weekly gain, despite risk appetite remaining shaky as investors continued to focus on mounting tensions between Russia and Ukraine. That said, from a technical standpoint, cable remains in a tight range between its 50-day moving average (to the downside), and the 200-day (to the upside), with the market showing little desire to budge from this, roughly, 2 cent wide band.

    Looking ahead, this week’s main event comes on Wednesday, when four BoE policymakers will testify to MPs on the January inflation report, potentially providing some hints on the policy outlook. Meanwhile, the latest PMI surveys are due today (Monday), providing further colour on the pace of the economic recovery, in addition to the persistence of price pressures in various parts of the economy.

    EUR

    The common currency was rather rangebound last week, trading in a tight 1 big figure range, albeit with a modest bearish bias as hawkish impetus from the February ECB meeting continued to fade. With attention remaining on Ukraine tensions, the common currency could be vulnerable to further downside, particularly given the reliance of numerous European nations on Russian gas. This week, the calendar is on the quiet side, besides PMI data due today, there is little of interest.

    USD

    The greenback attracted some haven demand last week, allowing the currency to rally despite a decline in Treasury yields, with the dollar index rising above the psychologically important 96 handle, and the 50-day moving average.

    Away from Russia-Ukraine tensions, analysts appear to be rapidly ramping up their expectations for Fed rate hikes, with JPMorgan now calling for consecutive 25bps hikes at the next 9 meetings; more hawkish than even money markets price at present. Looking ahead, in light of the above, Fed speakers are likely to be the main thing to watch this week, though investors will also continue headline-chasing amid persisting, and mounting, geopolitical tensions.

    Date Region Release Previous Consensus
    Tuesday 22nd February US Flash Manufacturing PMI 55.5 56.2
    Tuesday 22nd February US Flash Services PMI 51.2 53.2
    Tuesday 22nd February US CB Consumer Confidence 113.8 110.2
    Wednesday 23rd February NZ RBNZ Rate Decision 0.75% 1.00%
    Wednesday 23rd February UK Monetary Policy Report Hearings
    Wednesday 23rd February EU Final CPI Y/Y 5.10% 5.10%
    Thursday 24th February UK BOE Gov Bailey Speaks
    Thursday 24th February US Prelim GDP q/q 6.90% 7.10%
    Thursday 24th February US FOMC Member Mester Speaks
    Friday 25th February EU German Final GDP q/q -0.70% -0.70%
    Friday 25th February EU French Final GDP q/q 0.70% 0.70%
    Friday 25th February EU French Prelim CPI m/m 0.30% 0.40%
    Friday 25th February US Durable Goods Orders -0.70% 0.60%

    WORLD NEWS

    UK Prime Minister Boris Johnson is expecting to announce an end to Covid-19 regulations today. The Cabinet is due to meet later today to discuss and finalise the ‘Living with Covid’ plan which will allow the public to return to normality after a difficult period in the world’s history. Partially driven by the success of the vaccination programme, it allows the UK to consider lifting all remaining legal restrictions.

    US President Joe Biden and Russian President Vladimir Putin have accepted a proposal by France for a diplomatic summit, offering a renewed hope that diplomatic efforts can end the Ukrainian-Russian crisis. US officials have said the summit will go ahead as long as Russia does not invade Ukraine which will focus on stability in the region. A second summit is also planned with those involved in the crisis.

    JPMorgan economists are expecting the US Federal Reserve to raise interest rates by 25 basis points at nine consecutive meetings as they try to clamp down on inflation. The move will be against current market expectations, which believes the Fed will be a lot more aggressive in their interest rate hikes, some rumoured to be 100 basis points in the next meeting.

     

    Share Index Prev. Close Open
    FTSE100 7513.62 7513.62
    DAX 15042.51 15186.63
    CAC40 6929.63 6984.31

     


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