Author: Michael Crowley

Dollar benefits as stocks plunge

The Bank of England MPC raised interest rates by 25bps to 4%, as expected, with one member favouring a 50bps increase. The MPC also indicated that another increase is likely soon, probably either next month or at the following meeting in early February. Meanwhile, the dollar is benefiting from a ‘flight to safety’ amid a […]

Falling oil prices buoy markets

A continuing fall in oil prices contributed to a decline in government bond yields, a rally in equity markets, and a modest weakening of the dollar. The euro is trading at around $1.1250 against the US currency this morning, while sterling is trading at about $1.3475 and £0.8350 against the dollar and euro respectively ahead […]

A busy week ahead!

Equity markets sold off quite sharply on Friday, led by the Nasdaq in the US, while French government bonds came under pressure, with yields rising and spreads over Germany widening out again. The euro and sterling are managing to hold onto most of the gains they made against the dollar over the latter part of […]

UK Budget: A cautious package with slightly higher borrowing

Chancellor Healey’s Budget aimed to balance continued fiscal consolidation with some support for households and businesses financed by targeted tax measures. Although borrowing is still expected to decline over the next couple of years, higher interest rates and associated debt service costs means that the deficit will be larger than previously projected. The budgetary plans […]

Dollar gives up some of its recent gains

The ECB left the deposit rate on hold at 2.5% following yesterday’s meeting, as expected. The accompanying policy statement noted that the “increased magnitude and duration of the energy shock, as well as the implications for indirect and second-round effects, are likely to drive up inflation,” and while it also said that the recent tightening […]

Fed stays on hold, ECB to do likewise

The Fed left interest rates unchanged in a range of 3.75%-4% following yesterday’s meeting, as expected, though two (of 12) members voted for a 25bps increase. The accompanying policy statement noted that the “accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation” to the […]

Fed expected to stay on hold – for now

Rising oil prices and higher US bond yields overnight are supporting the dollar, which continues to advance ahead of the Fed’s interest rate announcement later today. It is trading at around $1.1125 against the euro and just below $1.33 against sterling, taking its gains versus both to around a cent since the start of the […]

A jam-packed few days ahead!

It is a jam-packed few days ahead that includes interest rate announcements from the Fed and ECB (and the Bank of Japan); some top tier economic data, including GDP and inflation in the US; earnings results from two of the AI hyperscalers, Microsoft and Alphabet; and the Budget in the UK. Regarding the central bank […]

‘Risk off’ day in markets

Rising oil prices (Brent spiked to over $113 p/b at one stage), falling equity markets, and a further sell-off in French bonds triggered a flight to the safety of US and German government bonds yesterday. The yen, Swiss franc, and the dollar benefited in the ‘risk-off’ environment that prevailed, with the euro and sterling falling […]

French yields rising, spreads widening

French government bond yields rose further yesterday and the 10-year spread over equivalent German bonds widened out again, to around 160bps, almost double the yield differential that prevailed at the beginning of September. There has been some limited ‘contagion’ to Italian bonds over this period, with the 10-year spread over Germany widening out by around […]