Pound

Cable continues to fall, with the drop reaching 250 pips.

The pound has had a bad day.

What does 10% inflation and a recession in early 2023 sound like?

That’s the long and short of the Bank of England’s decision today, with interest rates rising to 2.50 percent by the middle of next year.

The pound’s 2% drop today will undoubtedly add to inflationary pressures, while oil prices’ 1.2 percent rise will not help. The weekly cable chart shows a near-total lack of support until the low of 1.2085 in May 2020.

The weekly RSI is now at 18.2, indicating the possibility of an oversold bounce, but this is a fundamentally driven move.

Labor

Cable continues to fall, with the drop reaching 250 pips.

The pound has had a bad day.

What does 10% inflation and a recession in early 2023 sound like?

That’s the long and short of the Bank of England’s decision today, with interest rates rising to 2.50 percent by the middle of next year.

The pound’s 2% drop today will undoubtedly add to inflationary pressures, while oil prices’ 1.2 percent rise will not help.

The weekly cable chart shows a near-total lack of support until the low of 1.2085 in May 2020. The weekly RSI is now at 18.2, indicating the possibility of an oversold bounce, but this is a fundamentally driven move.

USD

As the NA session begins, the USD is the strongest and the GBP is the weakest.

The day after the FOMC has a bit of a hangover.

The “day after” can lead to a hangover, and the US markets are suffering from a headache as a result of yesterday’s FOMC decision.

Stocks rose, yields fell, and the dollar fell in response to Chair Powell’s comments, which took 75 basis points off the table for the Fed (at least for the time being).

Today, the USD is once again the strongest of the major currencies (aided by a falling GBP – more on that later), US stocks are higher, and yields are higher.

Meanwhile, in the United Kingdom, the Bank of England raised interest rates by 25 basis points, as expected, but painted a picture of high inflation and low growth, sending the pound down.

This morning’s snapshot shows the GBPUSD down -1.74 percent on the day, wiping out yesterday’s gains and moving to a new 2022 low (and low going back to July 2020).

 The pair is trading above and below 1.2400, with a low of 1.2378 reached. The previous week’s low was 1.24103. So far, the correction from the low has been able to stay just below that level, allowing the bears to maintain complete control.

OPEC+

OPEC+ reportedly agrees to maintain current oil output policy, according to Reuters, citing sources close to the meeting.

That was quick, but not at all unexpected. This means that the EU will continue to increase oil output by 432k bpd in June.

Is this going to be the shortest OPEC+ ministerial meeting ever? Maybe, but it’ll be close. In any case, continue as you please.

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