March 10, 2023

Daily Report 10/03/2023

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There were no significant domestic developments on Thursday with markets continuing to mull the outlook for interest rates. There are still strong expectations that the Bank of England will sanction a further 25 basis-point hike to 4.25% this month, but also expectations that the central bank will take a less aggressive stance than the Federal Reserve and ECB. There were, however, hopes that the economy will prove resilient, especially with increased room for fiscal support given lower gas prices.

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The Euro edged higher into Thursday’s New York open as the dollar lost its grip to some extent, but there was still a very important element of caution. ECB council member Villeroy stated that the central bank will bring inflation back to 2% by the end of 2024 or early 2025.

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US initial jobless claims increased to 211,000 in the latest week from 190,000 previously which was above consensus forecasts of 195,000 and the highest reading since late 2022. Continuing claims also increased to 1.72mn from a revised 1.65mn and equalled the highest figure since early 2022. Challenger job cuts declined to just below 78,000 for February from just below 103,000 the previous month, but this was still a substantial increase from the level near 15,000 last year. For the first two months of 2023, the number of layoffs was the highest since 2009. The data triggered some reservations surrounding labour-market trends, although the overall impact was limited at this stage with markets assuming that the Federal Reserve would want a sustained period of soft data before concluding that the labour market has weakened.

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13:30 US Nonfarm Payrolls (Feb)                                                    Forecast 205k    Previous 517k