Minimal FX volatility over the past 24-hours as Pakistan help in peace talks between Iran-US..
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| Pakistan has delivered the US' 15-point ceasefire proposal to Iran. Iran maintains there have been no talks with the US, but we have seen some de-escalation this week so far and improved financial market conditions.
ECB President Lagarde gave a press conference earlier today outlining what the ECB is currently discussing in terms of the initial and ongoing shock of the Iran-US war to the Euro-Zone.
"We are facing profound uncertainty about the path of the economy" was a key comment.
Money markets are expecting no interest rate hike next month, but as there is not a meet in May, June may see an interest rate hike for the EU. If and when this happens, the Euro will strengthen in value.
The ECB moved quickly out of the pandemic with cutting interest rates and analysts fully expect them to move the same if inflation threatens. Talking of, the new baseline is for 2.6% inflation by year-end (fine), adverse is 3.5% (ECB will move) and severe is 4.8% (possibly a 1%+ rate hike).
The UK's headline inflation rate for February came out as expected and the same as last at 3%. The more important core inflation rate increased slightly to 3.2%, but overall it was a non-event in the end. The next release and future readings on the matter won't be though..
Sterling remains 'favourable' versus the Euro and at 2025's average against the US Dollar. |
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