MNI BRIEF: Fed's Williams Says There's No Urgency To Cut Rates

MNI: US March Existing Home Sales Fell 4.3% To 4.19M

WILLIAMS: NOT BASE CASE TO RAISE RATES FURTHER

MNI BRIEF: Beijing Opposes U.S. Measures Against Chinese Steel

MNI China Daily Summary: Thursday, April 18

MNI BRIEF: M2 Growth To Slow On Weak Demand - PBOC's Zou

EZ/UK Bond Supply Calendar: EU, UK Synd W/C 22 Apr, BoE APF Mon

US EIA:NAT GAS STORAGE +50 BCF TO 2,333 BCF APR 12 WK

MNI: US NAR: MAR EXISTING HOME SALES 4.19M SAAR

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

© 1982-2023 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

vs STIR Spread: Has the GBP move just been a re-correlation move? (1/2)

GBP
  • There has been a lot of talk recently about the weakness of sterling over the past couple of months.
  • There are many reasons behind the move including:
    • The political outlook: Potential for the EU to retaliate if the UK revokes part of the NI Protocol and the fall in support for the ruling Conservative party (considered more market-friendly than Labour still - even though Labour have shifted notably to the right since Starmer's leadership began).
    • The growth outlook: The UK is doing less than most European countries to support consumers with rising energy bills. And at the same time is increasing national insurance (a form of payroll tax paid by by employees and firms). Both of these while the UK economy is still adjusting to the structural changes of both Brexit and the pandemic.
  • However, it is the relative rate outlook that can still be considered to be a big driver of the moves in the pound. The UK began hiking rates and QT before the Fed and the UK's neutral rate of interest is considered to be considerably lower than that of the US. So the UK rate hike cycle is at a completely different stage to the US or Eurozone. UK hikes are likely to slow as the neutral rate is approached, while rates are still comfortably in accomodative territory in both the US and the Eurozone.
Homepagemarkets-real-timeBulletMarketsForeign Exchange Bullets

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.