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On November 24th, Alexei Pushkov, a member of the Constitutional Committee of the Federation Council of Russia, argued that the EUs plan to mediate the conflict in Ukraine is a carefully crafted scheme to perpetuate the conflict. Pushkov stated, "Europes peace plan is not a genuine peace plan, but a plan to continue the war. And it has been carefully considered and corrected." The supplementary plan on Ukraine proposed by the EU, released on Sunday, includes 28 points, including a suggestion that Ukraine could join NATO, a possibility unacceptable to Russia. The plan suggests that Europe proposes allowing Ukraine to join NATO if NATO member states reach a consensus. The European proposal does not specify a timeframe for holding elections in Ukraine. It also includes a statement that NATO will not deploy troops in Ukraine, though this is stated as "in peacetime." Furthermore, the European proposal does not include recognition that Crimea, Luhansk, and Donetsk are de facto "Russian territory."Canadian Prime Minister Carney: Indian Prime Minister Modi and I have launched negotiations on a trade agreement that is expected to more than double our trade volume to $70 billion.On November 24th, Ukrainian President Volodymyr Zelenskyy delivered a speech on the 23rd, local time, briefing the Ukrainian delegation on the series of high-level talks held that day in Geneva, Switzerland. Zelenskyy stated that Ukraine is very carefully formulating the steps needed to end the conflict. He revealed that the negotiations in Switzerland on the 23rd would continue, with the team expected to work until late at night and submit further progress reports. Regarding communication with US representatives, both sides maintained substantive dialogue, and Ukraine has received positive signals that US President Trumps team is carefully listening to Ukraines position and concerns. Zelenskyy emphasized that ensuring the steps to end the conflict are effective and feasible is crucial. The current acceleration of the diplomatic process is a positive sign, and Ukraine expects the final outcome to be reflected in a series of correct, powerful, and sustainable action plans.On November 24th, representatives from Ukraine, the EU, and the US met in Geneva, Switzerland, on Sunday to discuss the US-proposed 28-point plan to end the Russia-Ukraine conflict. The EU representative reportedly presented a European version of the counter-proposal. According to the EUs counter-proposal, the number of Ukrainian troops would be capped at 800,000, higher than the US-proposed 600,000. Ukraine also pledged not to use military means to reclaim occupied sovereign territories, and that territorial exchange negotiations would begin from the current military contact line. The EU further proposed that Ukraine would receive a US security guarantee similar to Article 5 of NATO, and that NATO would agree not to permanently station NATO-commanded troops in Ukraine during peacetime, with NATO aircraft only stationed in Poland. Whether Ukraine would join NATO would depend on the consensus of NATO member states, but currently, there is no such consensus. Furthermore, Ukraine will hold elections as soon as possible after the signing of a peace agreement.On November 24th, German Chancellor Merz stated during the G20 summit in Johannesburg, South Africa on the 23rd that he had proposed a simplified version of the "28-point" plan put forward by the United States to end the Russia-Ukraine conflict. Merz stated that this plan is "below the level of a complete solution" and aims to find workable points of consensus in complex negotiations. He indicated that the "28-point" plan is too complex to reach an agreement in such a short time, and he hopes that the "simplified plan" will at least attempt to find a point of entry for reaching a consensus. Merz pointed out that given the current differences, reaching an agreement by the 27th, as demanded by US President Trump, is quite difficult.

GBP/USD falls to around 1.2370 as the BoE considers taking swift action ahead of UK inflation and US purchasing managers' indices

Alina Haynes

Apr 17, 2023 13:53

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On Monday morning, the GBP/USD currency pair retested an intraday low of 1.2390 after extending Sunday's decline from a 10-month high. To provoke adverse after breaking a four-week uptrend, the Cable pair explains the most recent concerns emanating from the United Kingdom (UK) and the optimism surrounding the Federal Reserve (Fed).

 

According to the Financial Times (FT), "The Bank of England is considering a major overhaul of its deposit guarantee scheme, including increasing the amount covered for businesses and compelling banks to pre-fund the system to a greater extent to ensure faster access to cash when a lender collapses."  The revelation fuels banking concerns in the United Kingdom and places pressure on the Cable duo.

 

UK Chancellor Jeremy Hunt's concerns about US subsidies may also be exerting downward pressure on the GBP/USD exchange rate as British firms rush to claim benefits before leaving the country. According to the news, "Chancellor Jeremy Hunt warned Sky News that Britain should be wary of any new subsidies, warning that they could undermine the economy and possibly even spark a protectionist trade war."

 

A larger-than-expected decline in US retail sales was unable to offset positive data from US industrial production and the University of Michigan's (UoM) consumer confidence index from the previous day. Despite this, US retail sales decreased by 1.0% in March compared to the predicted -0.4% decline and February's -0.2% decline. As opposed to the 0.2% market consensus and previous reading, Industrial Production increased by 0.4% in the month in question. The preliminary result of the University of Michigan's (UoM) Consumer Confidence Index for April, which increased to 63.5 from 62.0 analysts' expectations and previous readings, was also encouraging. In addition, inflation forecasts for the next year increased from 3.6% in March to 4.6% in April, while inflation forecasts for the next five years decreased by 2.9% during the same month.

 

Notably, Fed officials have recently appeared more hawkish than their BoE counterparts, which has exerted additional pressure on the GBP/USD exchange rate.

 

In this environment, the S&P 500 Futures exhibit modest gains following Wall Street's pessimistic close, while bond yields remain unchanged following weekly increases.

 

Moving forward, the current week is crucial for GBP/USD speculators as it contains a variety of high-quality inflation, employment, and UK PMI data. These data may be used to support the Bank of England's (BoE) officials' waning hawkish inclination and may keep bears in play. However, the US PMIs and Fed discussions should not be disregarded when looking for clear guidelines.

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