The US data remained robust with initial jobless claims increasing only slightly to 239,000 in the latest week from 234,000 previously which still indicated a strong labour market with layoffs remaining at low levels. There was a small decline in housing starts to an annual rate of 1.25mn from 1.28mn previously while permits rose to 1.29mn from 1.23mn.
There was also a strong reading for the February Philadelphia Fed manufacturing survey which increased to 43.3 from 23.6 and the highest reading for over 30 years, although the prices indices declined slightly on the month.
Fed Vice Chair Fischer backed Yellen’s stance on policy with expectations of further increase in rates and markets will continue to monitor comments in order to assess the potential for a rate hike at the March meeting. The dollar pushed higher immediately after the data, but was again unable to gain any traction and the Euro resisted any significant selling. Overall, the Euro rallied to the 1.0680 area as the dollar’s trade-weighted index declined by around 0.60%.
What is the Mar-a-Lago Accord, and should markets care? At heart, the Mar-a-Lago Accord is a proposal for President Trump to weaken the US Dollar. As we know, Trump’s typical deregulatory and risk-inducing persuasion would, all other things equal, increase demand for the US Dollar. As far as the relationship between perceived risk and the […]
Holding on With less than a 10% probability of a cut priced into the Reserve Bank of Australia’s (RBA) latest monetary policy decision, it is unsurprising markets open today to news of a hold. The RBA adopted a lower peak rate of benchmark interest than the likes of the UK and USA with lower inflationary […]
Pointless Being the Point Yesterday, UK Chancellor Rachel Reeves delivered her Spring Budget to the House of Commons. Since the government’s first budget last year, bond markets have not been kind to the Chancellor, taking its angst out in the form of higher yields. The selling (and increased issuance) of UK gilts has inevitably created […]