Daily Market Update 23/09/2022

“The Bank of England has said that Britain’s economy is now in recession, as it hiked rates by 50bps for the second meeting in-a-row to tackle the worst bout of inflation for 40 years. The meeting statement indicated the BoE maintains a hawkish bias.”

Main Headlines

In a major action to address climate change, the Senate ratified an international agreement that compels the United States and other countries to limit use of hydrofluorocarbons, highly potent greenhouse gases commonly used in refrigeration and air conditioning that are far more powerful than carbon dioxide. The so-called Kigali Amendment to the 1987 Montreal Protocol on ozone pollution requires participating nations to phase down production and use of hydrofluorocarbons, also known as HFCs, by 85% over the next 14 years, as part of a global phaseout intended to slow climate change.

UK consumer confidence has fallen to another new low amid deep concerns about personal finances over the coming year. GfK’s long-running consumer confidence index fell five points in September to minus 49. The latest record low is the fourth out of the last five months, with confidence in personal finances over the coming year down nine points to minus 40 and confidence in the economy over the next 12 months down eight points to minus 68. The major purchase index, an indicator of confidence in buying big ticket items, remained unchanged at minus 38, but is 32 points lower than this time last year.

Markets

Stocks and US equity futures extended declines at the end of a week that underscored expectations for tighter monetary policy and a slowing global economy. Energy shares led a drop in Europe this morning as oil headed for a fourth weekly loss. The MSCI Asia Pacific Index was set for a sixth weekly decline, the longest streak since May, after the S&P 500 Index closed at the lowest level since June. Strategists are giving up on a year-end rally for European stocks as Goldman Sachs Group Inc. slashed its year-end target for the S&P to 3,600 from 4,300, arguing that a dramatic shift in the outlook for higher interest rates will weigh on valuations.

GBP

Sterling is weaker than most major currencies in the early morning trade. Chancellor Kwasi Kwarteng has announced that April’s National Insurance hike is to be reversed from 6 November. The 1.25 percentage point increase was introduced under former chancellor Rishi Sunak, but during the Tory leadership race Liz Truss pledged to change it. The UK government has introduced a new Bill designed to remove the special features of EU law that remain in the UK legal system. Ministers are setting up a £500m emergency fund to get thousands of medically fit patients out of hospital as soon as possible in an attempt to prevent the NHS becoming overwhelmed this winter.

EUR

Euro is stronger against sterling and weaker against the dollar this morning. The downturn in German business activity deepened in September as higher energy costs hit Europe’s largest economy and companies saw a drop in new business. Vladimir Putin was “pushed” into the war on Ukraine to install a new government in Kyiv, former Italian premier Silvio Berlusconi said late on Thursday, in comments likely to concern Western allies ahead of Italy’s election. Finland is considering barring most Russians from entering as traffic arriving from its eastern neighbour “intensified” following Putin’s order for a partial military mobilisation.

USD

The dollar is well bid against most major currencies overnight. Apple is facing additional pressure from US Senators as lawmakers in the chamber have asked members of the intelligence community to examine if a deal between the tech giant and Chinese memory chip maker Yangtze Memory Technologies poses national security concerns. US House Democrats released a framework for legislation that would restrict lawmakers and other senior government officials from trading in stocks. New York City will open two emergency centers to house migrants arriving on buses sent by the Republican governor of Texas in a political dispute over border security.

Ballinger & Co.. Morning Report- 23rd September 2022

Market Rates

Today’s Interbank Rates at 10:17 am against sterling movement.

GBP>EUR – 1.1462

GBP>USD – 1.1184

EUR>USD – 0.9764

GBP>CAD – 1.5138

GBP>AUD – 1.7003

GBP>SEK – 12.500

GBP>AED – 4.1102

GBP>HKD – 8.7850

GBP>ZAR – 19.916

GBP>CHF – 1.0976

  Today’s Calendar           

·       9:00 a.m.: Spain 2Q GDP

·       9:15 a.m.: France Sept. Manufacturing and Services PMIs

·       9:30 a.m.: Germany Sept. PMIs

·       10:00 a.m.: Euro-area Sept. PMIs

·       10:00 a.m.: ECB’s Kazaks speaks

·       10:30 a.m.: UK Sept. PMIs

·       3:45 p.m.: US Sept. PMIs

·       7:00 p.m.: Baker Hughes US rig count

·       UK mini budget to be presented

  (https://frank-exchange.com/)

This document has been prepared solely for information and is not intended as an Inducement concerning the purchase or sale of any financial instrument. By its nature market analysis represents the personal view of the author and no warranty can be, or is, offered as to the accuracy of any such analysis, or that predictions provided in any such analysis will prove to be correct. Should you rely on any analysis, information or report provided as part of the Service it does so entirely at its own risk, and Frank eXchange Limited/Manor House Foreign eXchange Limited accepts no responsibility or liability for any loss or damage you may suffer as a result. Information and opinions have been obtained from sources believed to be reliable, but no representation is made as to their accuracy. No copy of this document can be taken without prior written permission.

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