Sterling’s recovery from the losses of last Wednesday continued into the new week, with gains against the euro and US dollar, close to 1% against the latter.
Last night’s speech from Bank of England (BoE) governor Andrew Bailey at the London School of Economics may have helped. He emphasised that inflation remains the top target, and poured cold water on any idea that UK banking was under any threat.
Although the BoE have just hiked rates by 0.25%, pound watchers will be listening for any more clues on what next for the BoE’s attitude towards monetary policy through the year when Bailey speaks again this morning, as will several of the other eight BoE ratesetters.
Also today, we’ll see a flurry of key economic releases from the US. This includes the latest US house price index, wholesale inventories and a testimony from the Fed’s vice chair for supervision, Michael S.Barr.
On Thursday, eurozone markets will see the latest inflation figures for Germany.
It was a good day across the board for UK, eurozone and US stocks yesterday. European stocks started the week on a high with equity markets rising. The benchmark Stoxx 600 was up 1.1%, while the Stoxx bank index gained 1.5% and the Deutsche Bank added more than 6%.
Equities in London also had a positive day yesterday with the benchmark FTSE 100 adding roughly 1% to close at 7,480. This was largely driven by gains in the energy and financials sectors. In addition, some fears of a broader threat to the global financial system eased after US lender, First Citizens BancShares, said it would purchase Silicon Valley Bank’s loans and deposits.
While over in the US, the blue-chip Dow rallied more than 100 points in early deals on Monday. Meanwhile the S&P 500 was up 0.2%. This followed news of additional support from US authorities for the banking sector.
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