Market Update

Last week hosted an eventful week from FOMC members with speeches shifting markets lower and fulfilling trader’s bets of an aggressive Fed tightening program.

It is clear from the Fed’s perspective they need financial conditions to drastically tighten with Fed Chair Powell making that clear in his March press conference. This message failed to have a real felt effect on markets last week when the Fed minutes showed that due to the uncertainty presented by Russia-Ukraine we will most likely see a 50bps hike later this year with a 25bps priced in for the May rate decision.

As we know the Fed balance sheet and U.S equities have a direct correlation (shown below), so an aggressive tightening by the Fed can only lead U.S equities lower in the aftermath.


What does this mean for the dollar?

Bets are leaning towards a stronger dollar through the quantitative tightening process. Cable is expected to continue its decline against the dollar with the euro rate trading below the 1.0900 level not seen since March ‘22.

Today’s outlook: 

This week CPI data for the U.S economy is expected to come in above 8% further adding to the pressure the Fed are under to battle this uphill slope. The UK GDP YoY and manufacturing data are set to come in this morning; manufacturing data will give a proxy of how the economy has faired amidst recent conditions.

Leave a Reply

Your email address will not be published.

What's Going On?

Currencies 4 You Ltd is a company registered in England and Wales (registered no. 06866898). Registered office: Regus House Victory Way Admirals Park, Crossway, Dartford, Kent, DA2 6QD. Currencies 4 You Ltd Payment and Foreign Currency Exchange Services are provided by Currency Cloud Limited and Equals Connect Limited. For clients based in the United Kingdom payment services for Currencies 4 you are provided by The Currency Cloud Limited. Registered in England and Wales No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money (FRN: 900199). For clients based in the European Economic Area, payment services for Currencies 4 you are provided by CurrencyCloud B.V.. Registered in the Netherlands No. 72186178. Registered Office: Nieuwezijds Voorburgwal 296 - 298, Mindspace Nieuwezijds Office 001 Amsterdam. CurrencyCloud B.V. is authorised by the DNB under the Wet op het financieel toezicht to carry out the business of an electronic-money institution (Relation Number: R142701). Payment Services are provided by Equals Connect Limited, registered in England and Wales (registered no. 07131446). Registered Office: Vintners’ Place, 68 Upper Thames St, London, EC4V 3BJ. Equals Connect Limited are authorised by the Financial Conduct Authority to provide payment services (FRN: 671508). Payment services for Currencies 4 You Ltd are provided by Sciopay Ltd. Sciopay Ltd is a company incorporated in England & Wales. Registration No: 12352935. Sciopay Ltd is licensed and regulated by HMRC as a Money Service Business (MSB). Licence No: XCML00000151326. Sciopay Ltd is authorised by the Financial Conduct Authority as an Authorised Payment Institution. Firm Reference Number: 927951. Currencies 4 you's payment and foreign currency exchange services are provided by Global Currency Exchange Network Ltd T/A GC Partners. Global Currency Exchange Network Ltd is authorised by the FCA under the Payment Services Regulations, 2017 (FRN: 504346). Registered as a Money Services Business, regulated by HM Revenue & Customs ("HMRC") under the Money Laundering Regulations 2017. (Registration number is 12137189). Registered in England and Wales. Company number 04675786. Registered Office 3rd Floor 100 New Bond Street, London, England, W1S 1SP. | Terms and Conditions | Privacy Statement | Careers