Daily Market Update 05/01/2023

“The greenback held steady in choppy trading this morning after the release of the latest Federal Reserve minutes – policymakers remain focused on curbing inflation and do not expect interest rate cuts in the new year.”

Main Headlines

Inflation in the US has not “turned the corner yet” and it is too early for the Federal Reserve to declare victory in its fight against soaring prices, a top IMF official has warned. Gita Gopinath urged the US central bank to press ahead with rate rises this year despite a recent moderation in headline inflation following one of the most aggressive tightening campaigns in the Fed’s history. The comments come after a flurry of data suggested inflation in the US, Europe and other economies might have peaked, as energy prices fall from recent highs and the cost of goods such as home appliances and used cars starts to decline.

The recovery in activity in London’s offices and hotels after the pandemic lockdowns lagged behind many rival European cities in 2022. Offices and hotels in Amsterdam showed the largest increases in elevator usage last year. London offices were ranked fifth in terms of how much the use of lifts rose during the year, and its hotels came tenth. Data on elevator journeys are used as a proxy of activity levels in commercial buildings such as offices and hotels. The figures will add to worries among some policymakers and landlords over the slow return of workers to British companies’ offices.


European stocks and US equity futures slipped as investors balanced further signs of China’s reopening with cautious commentary from the Federal Reserve’s latest meeting. The Stoxx Europe 600 Index fell 0.3% in early trading, with consumer products stocks leading declines. Contracts on the S&P 500 and the Nasdaq 100 were about 0.3% lower. Chinese mainland and Hong Kong equity gauges rose in a rally helped along by news the border with China will gradually reopen. The Hang Seng Index climbed to the highest level since July and a gauge of Asian equities advanced.


Sterling is weaker than most major currencies in the early morning trade. PPE Medpro tried to sell the UK medical equipment with a safety report purportedly provided by a company that has denied authoring the document, the government has alleged in a £133mn lawsuit against the scandal-riven medical supplies group. Rishi Sunak yesterday outlined five key promises for the next general election, including expanding the UK economy and cutting NHS waiting lists, as he squared up to the Labour party at the start of a pivotal year in British politics.


Euro is well bid against most major currencies this morning. Germany’s health minister has expressed concern over a new COVID-19 subvariant linked to growing hospitalisations in the north-eastern United States, adding that Berlin was watching the situation closely. European Union government officials recommended on Wednesday that passengers flying from China to the EU should have a negative COVID-19 test before they board, as Beijing plans to ease travel restrictions despite a wave of new COVID infections.


The dollar is stronger against sterling and weaker against euro this morning. The US House of Representatives has failed for a second day to select a new Speaker, after California congressman Kevin McCarthy suffered a humiliating setback in fresh rounds of voting amid sustained opposition from an intransigent group of Republican party rebels. Federal Reserve officials warned they would need to see “substantially more evidence” of easing inflation before they are convinced that price pressures are under control as they backed fresh rate rises this year.

Ballinger & Co. Market Analysis– 05th January 2023

Today’s Market Rates

Today’s Interbank Rates at 09:39 am against sterling movement.

GBP>EUR – 1.1322

GBP>USD – 1.2030

EUR>USD – 1.0624

GBP>CAD – 1.6244

GBP>AUD – 1.7620

GBP>SEK – 12.645

GBP>AED – 4.4171

GBP>HKD – 9.4000

GBP>ZAR – 20.441

GBP>CHF – 1.1144

Today’s Highlights

·        8:00 a.m.: Germany Nov. Imports, Exports

·        9:00 a.m.: Austria Dec. CPI

·        9:30 a.m.: Germany Dec. S&P Global Construction PMI

·        10:00 a.m.: Norway’s PM Store Meets Germany’s Habeck in Oslo

·        10:00 a.m.: Poland Dec. CPI

·        10:30 a.m.: UK Dec. S&P Global/CIPS Services, Composite PMIs

·        10:30 a.m.: BOE decision maker panel survey

·        10:50 a.m.: France to sell bonds

·        11:00 a.m.: Euro-area Nov. PPI

·        11:00 a.m.: Italy Dec. CPI

·        12:30 p.m.: UK to sell bonds

·        1:30 p.m.: Fed’s Harker speaks

·        2:00 p.m.: National Bank of Poland minutes

·        3:20 p.m.: Fed’s Bostic speaks

·        3:00 p.m.: Polish Central Bank Governor Glapinski’s news conference

·        5:00 p.m.: EIA US crude oil inventories

·        7:20 p.m.: Fed’s Bullard speaks


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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