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Germanys August PPI month-on-month rate and the UKs August seasonally adjusted retail sales month-on-month rate will be released in ten minutes.The main palladium futures contract rose 2.00% intraday, currently trading at 310.20 yuan/gram.On September 18th, European Central Bank Vice President Aleksandar Vujic stated that market bets on further interest rate hikes by the ECB are primarily driven by rising energy prices, but policymakers will consider broader economic indicators when deciding on their next move. He said, "The pricing of the interest rate path is mainly driven by rising energy prices. I want to emphasize that we do not look solely at energy prices when making monetary policy decisions, but rather at a wider range of data and standards. Focusing solely on energy prices is not advisable, no matter how important they may be. If inflation remains high throughout the autumn and affects household income and consumption behavior, it will also have a dampening effect on GDP. We will observe the situation over the next few months and adjust policy accordingly." Global bond yields have risen to their highest levels since before the financial crisis due to rising inflation and interest rate expectations, as well as the huge borrowing needs of governments and technology companies. Vujic said these trends do not pose a threat to financial stability because eurozone banks are well-capitalized and have ample liquidity.ECB Vice President Vujicic: If inflation expectations decline over time, we may see bonds repriced.European Central Bank Vice President Vujicic: Responsible fiscal policy remains crucial.

Despite the fact that Eurozone interest rates are anticipated to peak sooner, the EUR/GBP looks to have breached over 0.8630

Daniel Rogers

Dec 07, 2022 15:12

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The EUR/GBP pair has had a stronger recovery from 0.8580 during the Asian session, approaching the pivotal 0.8630 level. Despite the European Central Bank (ECB) being close to reaching an interest rate high, there has been strong demand for Euro bulls. Thus, the monetary policy meeting scheduled for next week will be of utmost significance.

 

The cross is attempting to break strongly above the significant barrier of 0.8630 for the fourth time this week. The hawkish remarks made by ECB policymakers are holding back the euro bulls.

 

"There will be another rate hike," said Constantinos Herodotou, governor of the Central Bank of Cyprus, "but we are very near to neutral." The European Central Bank's chief economist, Phillip Lane, is unsure as to whether the inflation peak has already occurred or will take place in 2019. He stated that although "much has already been done," he does not rule out more rate increases.

 

Investors are currently looking forward to Christine Lagarde's speech, which will be revealed on Thursday. The ECB President is likely to lower her inflation projection in her future statement in light of the poor retail sales numbers.

 

In contrast to expectations for a 1.7% loss, this week's Eurozone retail sales numbers showed a 1.8% decline. Aside from that, annual economic data contraction came in at 2.7% as opposed to the 2.6% consensus expectation. A decline in household demand demonstrates the effectiveness of the European Central Bank's (ECB) policy tightening initiatives. To reach their sales targets, firms could feel pressured to lower the prices of their products and services.

 

The United Kingdom's deteriorating food crisis, brought on by growing costs and a labor shortfall, has had an impact on the Pound Sterling. According to Minette Batters, president of the National Farmers Union, "the government and the entire supply chain must act swiftly." The Financial Times stated that "tomorrow might be too late." The economy already faces rising food inflation, and the issue with the supply of food will make matters worse.


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