After making marginal losses yesterday ahead of the Federal Reserve’s meeting minutes, the euro and pound surged against the US dollar this morning, adding 0.4% and 0.3%, respectively, ahead of euro zone and UK PMI data.
After we logged off for the day, over in the US, the Fed’s January policy meeting minutes reported members remain worried about inflation and the risk of cutting rates too early, however, the market response was mostly positive as it reinforced the view that members are unclear about when rates cuts may occur.
The average contract interest rate for a 30-year mortgage in the US rose back up to 7.06% in the week ending February 16, likely influenced by news of inflation picking up in January. This is the highest homeowners have seen since early December.
In the UK, the book balance for factory orders rose by 10 points in February to -20, according to the Confederation of British Industry’s survey. This is the highest level the industry has seen since September 2023 and far surpassed expectations of -27. The gauge for average selling price expectations also rose to a high not seen since July 2023. While conditions remain challenging, these results provide hope for what’s to come.
The Office for National Statistics revealed that UK public sector net borrowing (excluding banks) was in surplus by £16.7 billion in January, marking the largest surplus since monthly records began in 1993. This was more than double the January 2023 surplus, but slightly below forecasts of £18.7 bn.
On a lighter note, the Bank of England announced yesterday that the first British bank notes with King Charles III on will be released on June 5.
In the news, UK gambling sites brace for a £2 million stake limit on digital slot machines in a new government-imposed maximum, which will be announced on Friday.
There are a few things economists will be keeping tabs on today. The first comes from the European Central Bank which publishes minutes from its latest policy meeting. Then, S&P Global publishes flash PMIs for the EU, UK, US, France and Germany.
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