Australia
With a 25 bp increase in interest rates, the Reserve Bank of Australia took interest rates to an 11 year high of 4.1% and with that increase took the total increase since May 2022 to 4% which is the most aggressive rate tightening cycle ever. This was not expected and consequently had a disproportionate effect in the market. Not content with that, the language from the central bank suggested further rises were on the cards in the fight to crush inflation. The Aussie dollar strengthened by 1%.
GBP/AUD 1.8630.
Japan
Recent moves by the Federal Reserve in raising interest rates and its language have served to strengthen USD. Yet again with USD/JPY trading around 140 talk has turned to pondering whether the Bank of Japan will intervene and at what level to reverse the move from 130 to where we stand now. Most expect intervention to be deployed first when/if the rate reaches 145 and then if necessary if JPY weakens towards 150 as it did in 2022. Meanwhile few market participants expect the JPY to strengthen much in the light of the BoJ’s low interest rate policy.
USD/JPY 139.85.
UK Interest Rates
In case you are getting dulled with pain on this one and have lost sight of what is next in store, the expectation is that the Bank of England will raise interest rates on June 22 to 4.75% and that rates will reach 5.5% later in the year. More positively ahead of the summer holidays GBP is firm against the EUR: GBP/EUR 1.1610.
Easyjet
Right up there with capturing the current zeitgeist for woke name badges is Easyjet, which is now including the pronouns by which their staff and aircrew identify on their name tags. It is all part of creating an inclusive environment where everyone can feel “comfortable.” Except for the customers of Easyjet of course who will end up paying for this inclusivity on top of the earlier indignity of Easyjet already advising their staff to no longer address passengers as Ladies and Gentlemen when saying good morning/afternoon/night.
Blind Faith
One of rock’s so called supergroups, Blind Faith comprised Steve Winwood, Eric Clapton, Ginger Baker and Rick Gretch and this day in 1969 they played to a crowd of 120,000 in London’s Hyde Park which turned out to be their one and only live performance. Here is the best song from the band: Can’t Find My way Home:
Come down off your throne and leave your body alone
Somebody must change
You are the reason I’ve been waiting all these years
Somebody holds the key
Well, I’m near the end and I just ain’t got the time
And I’m wasted and I can’t find my way home
I can’t find my way home
But I can’t find my way home
But I can’t find my way home
But I can’t find my way home
Still I can’t find my way home
And I’ve done nothing wrong
But I can’t find my way home
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Daily Brief – UK Equities
Humphrey Percy
Fri 6 Dec 2024
UK Equities We wrote recently about a European wide Santa Rally in Equities despite the political headwinds in Continental Europe, but it looks as if the UK market has finally managed to break out on the top side of its range and without wishing to jinx it, may be set fair. One well known Fund […]
Daily Brief – EU Stagflation
Humphrey Percy
Mon 25 Nov 2024
EU Stagflation With inflation blipping up and business activity turning down, the S word is back on the table. Not only manufacturing but also the services sector fell sharply in November with the Purchasing Managers Index at its lowest level this year. The EUR facing a rampant Dollar is increasingly undermined by its own weakening […]
Daily Brief – BRICS
Humphrey Percy
Wed 4 Dec 2024
BRICS In case you missed it, and I very nearly did due to the sheer amount of soon to be again President Trump’s social media output, he was vociferous in his opposition to a BRICS inspired alternative currency to USD. While we have been following the long running Brazil, Russia, China, India and South Africa […]
