Today's Interbank rates -
POUNDS TO US DOLLARS 1.6126
POUNDS TO EUROS 1.1877
POUNDS TO AUSTRALIAN DOLLARS 1.6065
EUROS TO US DOLLARS 1.3577
EUROS TO POUNDS 0.8419
EUROS TO AUSTRALIAN DOLLARS 1.3526
POUND HEADLINES:
- After the excitement generated by Mervyn King's letter to the Chancellor on Tuesday, yesterday's inflation Report and in particular King's comments at the press conference were more balanced on the outlook for interest rates than many had expected. The Governor stressed that the outlook for inflation remained highly uncertain. Reading between the lines this implies that a near term rate hike is not a done deal, although it does seem that the balance of opinion on the MPC is becoming more hawkish. Next weeks minutes for the February meeting should provide some further indication of the extent to which the consensus has moved.
- UK unemployment rose by 44,000 to almost 2.5 million in the three months to the end of December. The unemployment rate is now 7.9%, with youth unemployment running at 20.5%. The number of people claiming Jobseeker's Allowance also increased, by 2,400 last month to 1.46 million.
- On Friday we have Retail Sales data.
- Spain's long-dated bond auctions will attract attention but the long-term commitment of China to support Iberian debt means that, relative EU spread differentials aside, supply should pass without too many glitches.
- Jens Weidmann has been named to take over the helm of the Bundesbank, running the central bank of Germany in Europe's strongest economy. As the head of the Bundesbank Weidmann is expected to have a strong voice at the ECB.
- Tomorrow we have German PPI figures.
- The PPI figures for the US published yesterday showed a second successive rapid rise. However, this was mostly down to a big hike in the food and energy component reflecting the run up in oil and agricultural prices. More positively there was little sign of this being passed through into a more general rise in prices. It is expected a similar story will come out of today's CPI data. The headline figure is expected to be up by 0.4% on the month.
- However, despite their concerns about the increase in producer prices, analysts said that there were a number of other factors helping to keep a lid on inflation. On Wednesday, separate figures showed that industrialproduction slipped in January, and signals from the housing sector have been mixed recently. At the same time, the unemployment rate is proving difficult to bring down. Last week, the Federal Reserve chairman Ben Bernanke said the US unemployment rate would not return to pre-financial crisis levels for "several years".
- Initial Claims and Philly Fed survey likely to be the movers of the day unless the jump in PPI is repeated in CPI.
Kris Charalambides
FX Brokerwww.imsfx.co.uk
Tel: 0207 183 2790
No comments:
Post a Comment