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As of 09:30 Beijing time, WTI crude oil futures rose 3.23%, while US natural gas futures fell 2.78%.The Peoples Bank of China (PBOC) announced today that it conducted 269.5 billion yuan of 7-day reverse repurchase operations, with both the bid and winning bids amounting to 269.5 billion yuan. The operating rate was 1.40%, unchanged from the previous rate.The main contract for the container shipping index (Europe route) rose 253.3 points during the day, currently trading at 2635.0 points, an increase of 10.64%.The yield on 30-year Japanese government bonds rose 4.0 basis points to 3.740%.On March 30, Atsushi Mimura, Japans top foreign exchange official, issued his strongest warning to speculators to date, stating that if current market conditions persist, authorities may need to take decisive intervention measures in the foreign exchange market. "We are increasingly aware that speculative activity is not only heating up in the crude oil futures market, but is also rapidly spreading in the foreign exchange market," Mimura said at a press conference on Monday. He emphasized, "If this trend continues, we believe that swift and decisive action may be imminent." Mimuras remarks came after the yen fell below the 160-dollar mark last week—the critical level at which the Japanese government plans to implement foreign exchange intervention in 2024. He added, "We are fully prepared to respond, with a broad and comprehensive monitoring scope," implying that the Japanese government is not only closely monitoring foreign exchange market movements but also simultaneously paying attention to related markets such as crude oil futures.

GBP/USD seeks to regain 1.2300 as higher UK CPI strengthens the case for a rate hike by the Bank of England and the USD retreats

Alina Haynes

Mar 23, 2023 15:00

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During the Asian session, the GBP/USD pair attempts to reclaim the resistance level at 1.2300. Following a vertical correction, the Cable has recovered to near 1.2260 as the market anticipates that the absence of hawkish interest rate guidance from Federal Reserve (Fed) chair Jerome Powell while addressing the economy at the monetary policy meeting indicates that the Fed is close to ending its policy-tightening spell.

 

S&P500 futures have generated some gains in the Asian session following a decline on Wednesday as a result of Fed Powell's confirmation that the fight against intractable U.S. inflation will continue. Chairman of the Federal Reserve Jerome Powell has ruled out rate cuts in 2023, citing the difficulty of controlling inflation. In addition, US Treasury Secretary Janet Yellen's statement that the government "does not plan to insure all uninsured bank deposits" heightened fears of a banking sector collapse.

 

Following a recovery move, the US Dollar Index (DXY) has retreated on expectations that additional credit tightening to protect banking institutions will reduce overall demand, economic activity, and inflation. In the interim, the demand for US government bonds has increased as a result of expectations that US Janet Yellen will end further policy restrictions and reduce support for all bank deposits.

 

On the front of the United Kingdom, the Pound Sterling is likely to maintain its strength as the Bank of England (BoE) is scheduled to raise rates for the eleventh consecutive time. Governor Andrew Bailey of the Bank of England is expected to raise interest rates by 25 basis points (bp) in response to rising food and non-alcoholic beverage prices, as well as rising energy costs, which have contributed to inflation in the United Kingdom.

 

In the midst of global banking turmoil, the Bank of England's (BoE) interest rate decision will be difficult, as policymakers were divided over whether to raise rates further or maintain them at their present level.


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