Daily Market Update 31/01/2023

“The Federal Reserve’s borrowing surged to the highest in seven years with daily borrowing rising to $120 billion this month, indicating that policy tightening is putting rising pressure on liquidity for banks. Meanwhile, market sentiment continues with a cautious tone ahead of key central bank meetings this week – investors are hopeful that the fed will start moderating its policy tightening in the face of slowing inflation.”

Main Headlines

The Biden administration has stopped providing US companies with licences to export to Huawei as it moves towards imposing a total ban on the sale of American technology to the Chinese telecom equipment giant. Several people familiar with discussions inside the administration said the commerce department had notified some companies that it would no longer grant licences to any group exporting American technology to Huawei. The move marks the latest prong in Washington’s campaign to curb the Shenzhen-based tech company, which US security officials believe helps China engage in espionage. Huawei denies any involvement in spying.

The IMF said Britain is the only leading economy likely to slide into recession this year, predicting that UK household spending would falter under the weight of high energy prices, rising mortgage costs and increased taxes. The fund upgraded its forecasts for most leading economies and said the global outlook had brightened. But it identified the UK as an exception and said the British economy would shrink by 0.5 per cent between the final quarter of 2022 and the final quarter of this year. Even Russia’s economy is now likely to outpace the UK’s, growing 1 per cent this year, according to the IMF forecasts.


Stocks in Europe slipped as investors digested a flurry of corporate earnings and economic data while positioning for rate increases from the Federal Reserve and European Central Bank later this week. The Stoxx Europe 600 index opened modestly lower for a second day. Swiss lender UBS Group AG dropped more than 2% after reporting a slump in trading fees and transaction income at its key wealth management business. Bonds gained, with the German 10-year yield falling four basis points. Futures on the S&P 500 and Nasdaq 100 fluctuated after a torrid session on Wall Street that dragged the Nasdaq to its worst day since Dec. 22 as Apple Inc. and Microsoft Corp. weighed on the market.


Sterling is stronger against euro and weaker against the dollar this morning. UK airlines will be forced to “use or lose” their valuable take-off and landing slots this summer after the government announced “the return to business as usual” for aviation. The UK push into emerging green industries including hydrogen, carbon capture, batteries and floating wind turbines is under threat as the US and EU boost incentives for domestic green technologies. The ousted founder of Britishvolt is preparing a bid to try to buy back the defunct battery start-up out of administration.


Euro is weaker than most major currencies in the early morning trade. France managed to eke out meagre growth in the final quarter of 2022 as falling energy imports and firm business investment offset a pullback in consumer spending. German retail sales unexpectedly fell in December as a Christmas shopping period weighed down by high inflation and the energy crisis revived fears of a more marked slowdown in Europe’s largest economy. Norway’s sovereign wealth fund, one of the world’s largest investors, reported a record loss of 1.64 trillion crowns ($164.4 billion) for 2022, ending a three-year run of soaring profits.


The dollar is well bid against most major currencies this morning. US president Joe Biden has ruled out sending F-16 fighter jets to Ukraine, delivering a blow to Kyiv’s push to secure the combat aircraft just a week after Washington and Berlin agreed to supply it with tanks. Apple has been found to have broken labour laws on multiple occasions following a year-and-a-half investigation stemming from former employees’ complaints. The National Labor Relations Board said there was sufficient evidence to support charges against the technology company after two employees accused it of workplace harassment and suppression of labour organising.

Ballinger & Co. Market Analysis– 31st January 2023

Today’s Market Rates

Today’s Interbank Rates at 09:25 am against sterling movement.

GBP>EUR – 1.1384

GBP>USD – 1.2314

EUR>USD – 1.0816

GBP>CAD – 1.6568

GBP>AUD – 1.7568

GBP>SEK – 12.872

GBP>AED – 4.5218

GBP>HKD – 9.6500

GBP>ZAR – 21.516

GBP>CHF – 1.1428

Today’s Highlights

·        7:30 a.m.: France 4Q GDP

·        8:00 a.m.: Germany Dec. Import Price Index, Retail Sales

·        8:00 a.m.: Turkey Dec. Trade Balance

·        8:45 a.m.: France Dec. PPI; Jan. CPI

·        9:00 a.m.: SNB releases 4Q Currency Allocation

·        9:55 a.m.: Germany Jan. Unemployment Change

·        10:00 a.m.: Norway wealth fund’s key figures for 2022

·        10:00 a.m.: Euro Area Bank Lending Survey

·        10:00 a.m.: Italy Dec. Unemployment Rate

·        10:30 a.m.: Portugal Jan. CPI; 4Q GDP

·        10:30 a.m.: UK Dec. Mortgage Approvals

·        11:00 a.m.: Euro-area 4Q GDP

·        11:00 a.m.: Italy 4Q GDP

·        12:00 p.m.: Portugal Dec. Industrial Production

·        2:30 p.m.: Ukraine Dec. Industrial Production


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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