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On March 2nd, Bruyette & Woods stated in a research report that European insurers shares should be supported by rising risk premiums. Analyst William Hawkins wrote, "We believe the current share price weakness presents a buying opportunity for the sector, which will continue to demonstrate a risk-reward ratio superior to what is remembered from the 1910s." While the US attacks on Iran over the weekend were unexpected, they should not have caught European insurers off guard in terms of risk management processes, given Irans decades-long history as a sanctioned and marginalized regime. He added that underwriting losses are possible, but unless there are serious errors in company processes, it is difficult to imagine these losses having a substantial impact on the industry.March 2nd - Goldman Sachs analysts stated that the escalating situation in the Middle East is posing significant upside risks to the tanker freight market, with insurance premiums also rising sharply. They pointed out that even without further major disruptions in the Straits of Hormuz, preventative restocking and route diversions could further drive up already high freight rates. According to the US bank, global crude oil freight rates have risen by 50% this year due to increasing oil transport volumes at sea and Venezuelas growing use of legal tankers rather than a "shadow fleet." Freight rates are typically determined by the relationship between demand for tanker capacity and the number of available vessels.Iranian ballistic missiles struck central Israel, triggering sirens in the region.March 2 - The Israel Defense Forces confirmed that Iran launched missiles at Israeli territory, and the defense system is intercepting them.The UKs Maritime Trade Operations Office has received a report of an incident at the port of Bahrain.

GBP/USD aims to retake 1.2300 amid an upbeat market sentiment, with US/UK Inflation in the spotlight

Daniel Rogers

Dec 13, 2022 15:11

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After dipping as low as 1.2260 during the Tokyo session, GBP/USD demand has increased. The Cable is attempting to reclaim the round-level resistance of 1.2300 as investors' risk appetite has risen significantly ahead of the release of U.S. inflation data.

 

The US Dollar index (DXY) has fallen below the round-level support of 105.00 as investors' pre-US inflation jitters have dissipated. S&P500 futures are maintaining their gains from Monday due to expectations of a drop in inflationary pressures. The anticipated change in the Federal Reserve's (Fed) interest rate policy has reinforced optimism on a broader scale.

 

The street anticipates a reduction in the US Consumer Price Index (CPI), driven by a decline in gasoline costs and consumer-inflation estimates for one year. The Federal Reserve Bank of New York's monthly Survey of Consumer Forecasts reported on Monday that US consumers' one-year inflation expectations decreased to 5.2% in November from 5.9% in October, the greatest one-month reduction on record. Inflation expectations have consequently decreased to 7.3% for headline inflation and to 6.0% for core inflation.

 

On the British Pound front, investors anticipate the release of the United Kingdom Employment and CPI numbers on Tuesday and Wednesday, respectively. The quarterly Unemployment Rate (October) is anticipated to be 3.7%, up from the previously reported 3.6%. Aside from this, the statistics on Average Earnings is the most relevant aspect. Quarterly Average Earnings without Bonuses were anticipated to increase by 5.9% compared to the preceding announcement of 5.7%.

 

While it is anticipated that the headline rate of inflation in the United Kingdom would decline to 10.9% from 11.1%, as previously reported. As a result of the food supply issue, labor shortages, and growing input costs, food price inflation has soared. Investors should not overlook the possibility of an unforeseen inflation spike.

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