{"id":2648,"date":"2023-07-27T09:15:52","date_gmt":"2023-07-27T08:15:52","guid":{"rendered":"https:\/\/hcfx.sofyma.com\/?p=2648"},"modified":"2023-08-11T16:27:33","modified_gmt":"2023-08-11T15:27:33","slug":"fed-ecb-and-british-gas-in-focus","status":"publish","type":"post","link":"https:\/\/hamiltoncourtfx.com\/es\/fed-ecb-and-british-gas-in-focus\/","title":{"rendered":"FED, ECB and British Gas in Focus"},"content":{"rendered":"
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Fed Raise by Further 25bps<\/strong><\/h4>\n

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Yesterday, the US federal reserve met expectations by raising rates 25bps, bringing the central bank\u2019s benchmark target rate to 5.25%-5.5%. This marks the highest benchmark rate in 22 years, as policy makers continue to try to bring inflation back down to its 2% target, having decelerated to 3% last month. The Fed\u2019s decision marks the 11th rate hike since their monetary tightening cycle started last May, though markets are debating over whether this marks the Fed\u2019s terminal rate. Presently, money markets are pricing in around a 20% chance that the Fed will raise rates a further 25bps, with expectations centring on the CB potentially tapering rates in Q1 2024.<\/p>\n

With speculation growing over whether the Fed may have reached their terminal rate, Powell delivered a relatively hawkish press conference. Here, the Fed\u2019s governor maintained that it was too early to tell whether their latest rate hike would be the final in the cycle and that any future decisions would remain data dependent. Powell reiterated this by stating that the FOMC will remain \u201chighly attentive to inflation risks\u201d while \u201ccontinue to assess additional information and its implications for monetary policy\u201d. As such, Powell concluded \u201cI would say it is certainly possible that we would raise funds again at the September meeting if the data warranted\u201d.<\/p>\n

Powell also indicated that the rate of QT would remain the same. As of last Wednesday, the Fed\u2019s balance sheet stands at $8.3 trillion. On the topic of QT, the FT\u2019s Michael Howell recently wrote that \u201cthe promised fall in the size of the US Fed\u2019s balance sheet has been far from convincing. Falls in direct bond buying have been offset by other Fed liquidity-creating programmes such as short-term lending to commercial banks\u201d. For more of the article, follow the link below: https:\/\/www.ft.com<\/a><\/p>\n<\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n

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Profits Soar British Gas<\/strong><\/h4>\n

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British Gas have released their latest half-year profit figures which shows that the energy giant racked up profits of \u00a3969m over the six-month period. This comes as the energy price cap being raised allowed the company to charge households more for energy bills. Their latest profits represent just shy of a 900% increase from the same period last year, when energy prices soared following the Russian invasion of Ukraine, but the price cap limited the amount they could charge households and pass on rising costs to consumers. Their parent company Centrica reported a H1 profit of \u00a36.5bn for, compared against a \u00a31.1bn loss for H1 2022. Chris O\u2019Shea, Centrica\u2019s CEO stated that \u201cnothing is more important than delivering for our customers\u201d. O\u2019Shea recently accepted a \u00a34.5m pay packet.<\/p>\n

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Markets Await US GDP<\/strong><\/h4>\n

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At 13:30 today, markets will be focusing on the release of the latest US Q2 GDP print. Markets are currently predicting a figure of 1.8% growth on an annualised basis for the second quarter of 2023. If realised, this would mark the slowest rate of growth in a year, as investors continue to monitor the health of the US economy given tightening fiscal and monetary conditions.<\/p>\n <\/div>\n

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Focus Turns to Frankfurt<\/strong><\/h4>\n

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At 13:15 today, Frankfurt will be conducting their latest rate decision, with markets forecasting the ECB to raise rates by 25bps. If enacted this would bring their benchmark policy rate to 4.25%, brining borrowing rates to their highest level since October 2008. Their policy meeting later today follows 400 basis points of monetary tightening since July 2022, as inflation across the Eurozone hit record highs. With headline CPI across the Eurozone presently standing at 5.5%, inflation is now at its lowest level since January 2022, though this continues to concern policy makers, not least because of core consumer prices rising 20bps between May and June. With money markets pricing in around a 97% chance of a 0.25% increase today, markets are also pricing in around a 50% chance of a further 25bps hike in October.<\/p>\n

As alluded to, Eurozone inflation showed signs of decelerating to its lowest level since January 2022, though core inflation came above preliminary estimates remaining close to all-time highs. With energy prices continuing to subside, headline inflation fell 60bps from May\u2019s figure of 6.1%, marking the second consecutive fall and a considerable deceleration from October\u2019s all time high of 10.6%.<\/p>\n

Last month at the ECB\u2019s symposium in Sintra, Portugal, Lagarde indicated that Frankfurt would likely conduct further tightening. Here she stated that \u201cif the baseline stands, we know we will likely hike again in July\u201d. Over the course of the symposium, Frankfurt also pushed back against market projections of H1 2024 cut and markets continue to question whether the ECB will raise rates in September too. Regarding inflation, Lagarde cautioned that \u201cwe are not seeing enough tangible evidence of falling underlying inflation\u201d.<\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

Yesterday, the US federal reserve met expectations by raising rates 25bps, bringing the central bank\u2019s benchmark target rate to 5.25%-5.5%. This marks the highest benchmark rate in 22 years, as policy makers continue to try to bring inflation back down to its 2% target, having decelerated to 3% last month. <\/p>","protected":false},"author":15,"featured_media":2231,"comment_status":"open","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"rp-language":[16],"class_list":["post-2648","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-morning-updates","rp-language-en_gb"],"_links":{"self":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/2648","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/comments?post=2648"}],"version-history":[{"count":3,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/2648\/revisions"}],"predecessor-version":[{"id":2840,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/2648\/revisions\/2840"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/media\/2231"}],"wp:attachment":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/media?parent=2648"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/categories?post=2648"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/tags?post=2648"},{"taxonomy":"rp-language","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/rp-language?post=2648"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}