Market insights

Market Comment - 22nd March 2023

Good morning,

What a 24 hours. First GBP/EUR fell off a cliff yesterday on the back of poor public sector net borrowing and rhetoric from the ECB. However those losses have largely been gained back this morning with the UK inflation numbers. Analysts were expecting inflation to be coming under control and dropping compared to the previous month. However it was the exact opposite. Instead of 9.8% year on year it came in at 10.4%. This goes against the view provided by the Chancellor in the budget. It also means an interest hike of 25 points to 4.25% by the Bank of England tomorrow could be nailed on. What will be interesting is the BoE's reply to the global banking situation. That must be putting a potential brake on hiking rates further. A definite tug of war. The inflation hike was put down to shortages in fresh food such as tomatoes.

There could well be a bead on this later. The Federal Reserve in the US releases it's interest rate decision at early tea time later. Analysts are expecting a 0.25% hike to 5%. It's anticipated to be the hot ticket in town at 6pm UK time. In the US there really is a pull in both directions with inflation on one side and failing banks on the other.

At the same time as the rate decision there's also the FED's monetary policy statement and federal open market committee press conference.

Around the scheduled news there's a couple of speeches from the ECB before an EU leaders summit throughout tomorrow.


Today’s Economic Calendar

EUR: 08:55 ECB's President Speech

EUR: 09:30 ECB's Philip Lane Speech

EUR: 13:45 ECB's Fabio Panetta Speech

US: 18:00 FED's Interest Rate Decision

US: 18:00 FED's Monetary Policy Statement

US: 18:30 FOMC Press Conference

EUR: Thursday EU Leaders Summit


As ever we look forward to keeping you in the loop and look out for our next update.

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