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European Central Bank officials expect to further tighten policy in October.On September 10th, the Trump administration announced it would send $500 to nearly one million Americans, arguing that those who purchased health insurance through the federal Affordable Care Act (ACA) marketplace were being "overcharged." The White House said Thursday that the checks are expected to mail out in October, just before the midterm elections that will determine control of Congress. Widespread disapproval of Trumps handling of the cost of living has hampered Republican candidates in key districts nationwide. The White House stated that the payments related to Obamacare were due to a "significant cash surplus" accumulated during the Biden administration, accusing the Biden administration of charging "excessive" user fees to those using the federal marketplace in the form of "higher premiums." Nevertheless, these payments—which the White House describes as costing nearly $500 million—could exacerbate ongoing concerns about inflation and the nations escalating budget deficit and public debt. Trump has long attempted to repeal Obamacares landmark law but has failed. In addition, he has proposed directly subsidizing Americans insurance purchases instead of paying health insurance companies.The French National Institute of Statistics and Economic Studies (INSEE) projects that French HICP inflation will rise to 3.1% in December from 2.7% in August. The INSEE also projects French economic growth of 0.4% in 2026, lower than the 0.7% forecast in June.The International Monetary Fund (IMF) says the energy shock from the Middle East wars is not over yet; global debt pressures are mounting and the process of inflation falling has stalled.On September 10th, Guan Zhiou, Secretary of the Hubei Provincial Party Committee, met with Robin Li, founder, chairman, and CEO of Baidu Group, in Wuhan. Guan Zhiou expressed his hope that Baidu Group would continue to deepen its presence in Hubei and strengthen cooperation in areas such as artificial intelligence and geospatial information to achieve mutual benefit and win-win development. Hubei will adhere to the principle of "responding to every request and not interfering unnecessarily," striving to create a first-class business environment and provide favorable conditions for Baidu Groups development in Hubei.

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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