Market insights

Market Comment - 12th May 2023

Good morning,

The UK interest rate was raised by the expected 0.25% to 4.5% yesterday. This caused an immediate weakening in Pound rates that was exacerbated by rhetoric from the Bank of England Governor, Andrew Bailey, later.

Both GBP/EUR and GBP/USD softened yesterday afternoon. However there has been a small recovery this morning on the back of the preliminary GDP numbers out from the UK which was in line with expectation with 0.1% quarter on quarter growth.

There's a speech later from a member of the Bank of England, Huw Pill. It was Mr. Pill's previous radio interview that moved Pound rates quite dramatically. He indicated that consumers were essentially spending beyond their means which was one of the factors of the heightened inflation rate.

Later there's US led data with the Michigan consumer sentiment index out mid afternoon followed by speeches by 3 members of the FED tomorrow.

Business news centres on the 0.1% quarter and quarter growth which was put down to industrial action in the UK. The other note is the industrial action on rail services affecting the UK today.

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Economic calendar

UK: 12:15 BoE's Huw Pill Speech

US: 15:00 Michigan Consumer Sentiment Index

US: Saturday 00:45 FED's James Bullard Speech

US: Saturday 00:45 FED's Philip Jefferson Speech

US: Saturday 15:30 FED's Lisa Cook Speech

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

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