Update –

Treasury Market Commentary

A weekly economic update from our Treasury team.

Published

10th September 2021

Category

Macro Commentary

Bank of England officials were relatively optimistic on the economy this week, as they remain focussed on inflation, and how the jobs market performs once the furlough scheme ends at the end of this month.

The market is currently pricing in a 0.15% rate increase in May next year.

The outlook, however, remains highly challenging with the virus continuing to be a huge threat as we move into autumn and schools and universities return. Tax increases announced this week have weighed on market sentiment as they are expected to hinder economic growth.

Global equity markets have edged lower on growing concerns that supply chain issues and labour shortages could lead to an economic slowdown.

In the US, the narrative remains very much about QE tapering, with the Fed also being guided by the inflation and jobs numbers.

Whilst in Europe, the ECB kept interest rates on hold as expected, but will slow the pace of their emergency bond buying program as the economy continues to recover.

Currency markets remain rangebound and lacking any real conviction.

GBP/USD remains within its recent range of 1.3700 – 1.3900, whilst the major levels to watch are 1.3500 and 1.4000.

GBP/EUR meanwhile continues to trade within the well-established 1.1500 – 1.1800 range.

GBP/EUR – 1-year chart

Week Ahead

Date

Release

Last

Expected*

14/9/21

UK Average Weekly Earns. 3M/YoY

8.8%

n/a

14/9/21

UK Unemployment Rate

4.7%

n/a

14/9/21

US CPI YoY

5.4%

5.3%

15/9/21

UK CPI YoY

2.0%

n/a

15/9/21

UK RPI YoY

3.8%

n/a

15/9/21

UK House Price Index YoY

13.2%

n/a

17/9/21

UK Retail Sales YoY

2.4%

n/a

17/9/21

EU CPI YoY

2.2%

n/a

*Bloomberg survey / Not available

Foreign Exchange

Currency

Last

Currency

Last

EUR/USD

1.1830

USD/JPY

109.95

GBP/USD

1.3865

AUD/USD

0.7380

GBP/EUR

1.1715

GBP/AED

5.0925

USD/CHF

0.9170

XAU/USD

1802

Equity Indices

Indices

Previous Close

YTD % Change

FTSE 100

7022

+8.70%

S&P

4493

+19.63%

EUROSTOXX

4177

+17.59%

UK Benchmark Rates

Libor

 

Swap Mid (SONIA)

 

3 month

0.06263%

2 year

+0.31%

12 month

0.24288%

5 year

+0.51%


View Arbuthnot Latham’s Private and Commercial deposit rates.

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Weekly

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