Happy Friday, traders.
Welcome to our weekly market wrap, where we look back at these last five trading days with a focus on the market news, economic data and headlines that had the most impact on the financial market – and may continue to into the future for the US Dollar and other key correlated assets.
On Thursday as expected, the Swiss National Bank has raised its key interest rate by a further 25 basis points to 1.75%. This brings the total amount of rate hikes in this cycle to 250 basis points in one year, well below the European Central Bank’s 400bp and the Federal Reserve’s 500bp. At the same time, the SNB continues to intervene in the foreign exchange market by selling currencies, thereby strengthening the Swiss franc, and bringing down imported inflation.
Later in the day, it was BOE turn to continue hiking rates. BoE decision may have been its best executed in the current tightening cycle. The bank began hiking rates in December 2021, so this is a compliment as much as a critique of the colloquial ‘unreliable boyfriend’. The BoE is not alone in this club, however. The BoC also rolled out a mostly unexpected hike that our economics team anticipated as the right thing to do after not acting since January.
The day closed with Jerome Powel testifying, with the most important parts of his speech to be:
• We Don’t See Rate Cuts Any Time Soon
• We Want to Be Confident Inflation Will Continue to Move Down
• We Think We Are Within a Couple of Rate Hikes of The Level We Need to Be
Thanks for reading! Have a great weekend.
Important Note: The information found on Ausprime platform is intended only to be informative, is not advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not include any specific investment objectives, financial situation and needs of any specific person who may receive it. The past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statement.
