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    Weekly Report 28.03.2022 & World News


    Sterling largely trod water last week, with cable comfortable trading just a handful of pips either side of the 1.32 handle, amid a fairly quiet and largely rangebound G10 FX market last week. It was interesting, however, that the risk-sensitive GBP was not able to take advantage of another positive week for global equity markets, with the S&P 500 having now notched its best 2-week run in 2 years.

    The lack of any rally may, perhaps, be due to the market having already priced in as much BoE tightening as it is comfortable doing, particularly with headwinds facing the UK economy intensifying by the day.

    This week, a quiet UK economic docket awaits, with no major economic releases due, besides the final revision to Q4 2021 GDP, which is unlikely to be a significant market-mover


    The common currency saw some downside last week, though ultimately remains confined to the roughly 3-big figure range that has been in place for a month, since the EUR’s post-ECB rally in early-February fizzled out. Surprisingly, for a currency on the borders of a warzone, the EUR has continued to be relatively resilient in nature, providing further evidence that the conflict in Ukraine is no longer a significant concern for market participants.

    Looking ahead, as with the UK, there is a light economic calendar due this week, with the bloc’s latest unemployment figures the only release of note.


    Besides geopolitics, it is the chances of a 50bps hike at the May FOMC meeting which continue to be the market’s main focus. Last week saw said chances rise above 75%, driven by the lowest initial jobless claims print since the late-1960s, and another round of strategist (BofA, Citi, Goldman) calls for a series of 50bps hikes in successive months.

    Despite this, and the more than 30bps rise in 2- and 10-year yields over the course of the week, the USD failed to find significant demand, with the Dollar Index remaining in a tight 97.70 – 99.40 range; though higher yields did spark another round of violent JPY selling, with USD/JPY trading to 6-year highs.

    Should we have reached ‘peak hawkishness’, it is likely that yields will soon begin to roll over, putting the bears back in the driving seat, initially targeting a break of the aforementioned low in the DXY.

    The US economic calendar is busy this week, including the latest core PCE report on Thursday (the Fed’s preferred inflation gauge), followed by March labour market data on Friday, where investors will closely examine the average hourly earnings component to gauge the inflationary implications of the extremely tight jobs market.

    Date Region Release Previous Consensus
    Monday 28th March UK BoE Governor Bailey Speaks
    Tuesday 29th March CH SNB Member Zurbrugg speaks
    Tuesday 29th March US JOLTS Job openings 11.26m 11.00m
    Tuesday 29th March US CB Consumer Confidence 110.5 106.9
    Wednesday 30th March UK BoE Member Broadbent Speaks
    Wednesday 30th March US ADP Non-Farm Employment Change 475k 455k
    Wednesday 30th March US Final GDP q/q 7% 7.10%
    Thursday 31st March EU German Retail Sales m/m 1.40% 0.50%
    Thursday 31st March UK Final GDP q/q 1% 1%
    Thursday 31st March EU Unemployment Rate 6.80% 6.70%
    Thursday 31st March CAD GDP m/m 0% 0.20%
    Thursday 31st March US Unemployment Claims 187k 200k
    Friday 1st April US Average Hourly Earnings m/m 0% 0.40%
    Friday 1st April US Non-Farm Employment Change 678k 485k
    Friday 1st April US ISM Manufacturing PMI 58.6 58.9


    For the first time since the financial crisis, NatWest is no longer majority owned by the state. The Government provided with a part sale reducing the shareholding from 50.6% to 48.1% raising £1.2bn in the process. This is the fifth share sale of its NatWest holdings as the Government looks to return private ownership to corporations brought into public ownership because of the 2008 financial crisis.

    Seen as the first big test for German Chancellor Olaf Scholz, his Social Democrats party achieved a majority victory in the western state of Saarland on Sunday. The win puts the party on top in the first of four regional elections taking place this year and is the first time they have won this region for 23 years.

    Talks between Ukraine and Russia are set to continue today in Turkey. The goal for Ukraine remains the same, for Russia to stand down from their invasion as Ukrainian President Zelensky shows willingness to discuss a ‘neutral status’ between NATO and Russia. Several rounds previously have failed to end the war as it enters in its second month.

    Share Index Prev. Close Open
    FTSE100 7483.55 7483.55
    DAX 14305.76 14376
    CAC40 6553.68 6578.72

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