Market Update

Global Central Banks Start Turning Off Cash TapsAs speculation grows about when the US Federal Reserve will begin reducing the size of its balance sheet, some analysts say the era of “quantitative tightening” has already started and “quantitative easing” is over.Central bank balance sheets have ballooned since the pandemic struck …

The EUR/USD pair buying hit overdrive on Wednesday, but the pace of gains has been more measured on Thursday. The pair is now consolidating in the 1.1450 area as traders assess whether the recent dollar long-squeeze is over.While the pair continues to trade with modest gains of about 0.1% on …

The leading card payments firm is in talks with central banks concerning a platform is designed to test CBDCs and Visa productsVisa joined its rival Mastercard in offering central banks a way to test retail applications for digital currencies they might issue.The card payment provider will begin piloting a program …

Outgoing Fed Vice Chair Richard Clarida, who will resign from his position on Friday, two weeks before the end of his term, said on Thursday that commencing policy normalization in 2022 would be entirely consistent with the Fed’s new flexible average inflation targeting framework. The US economy is well above …

Chicago Federal Reserve President Charles Evans said on Thursday that three rate hikes in 2022 would be a good “opening bid”, though it could be four if inflation doesn’t improve fast enough.Evans added that he is reluctant to declare that the US has reached full employment, but that inflation is …

UK pubs, bars and restaurants saw hefty drop in trading over Christmas and New Year, while more Americans filed new jobless claims last week. Trading at hospitality venues slumped by 60% on Christmas Day, 31% on Boxing Day and 27% on New Year’s Eve, compared to 2019’s pre-pandemic levels.The figures, …

US equities mostly fell on Thursday, with losses in large-cap tech stocks leading the fall. The S&P 500 was last down about 0.5% and testing the 4700 level, while the Nasdaq 100 index was last down 1.4% and back nuder 15,700. Apple was down nearly 1.0%, Meta (Facebook) was down …

Wholesale inflation still shows lots of upward pressure on prices in the economy. The numbers: Wholesale prices rose just 0.2% in December to mark the smallest increase in 13 months, perhaps a sign that high inflation is finally starting to ease after the biggest run-up in nearly 40 years.The increase …

Fed Vice Chair nominee Lael Brainard, speaking at a hearing before the Senate Banking Committee on Thursday, said that the Fed’s actions will bring inflation down whilst also allowing the US labour market to make a full recovery. So far in the hearing, Brainard has not been questioned extensively on …

The headline US Producer Price Index (PPI) rose at an annual pace of 9.7% in December, according to the latest report from the US Bureau of Labor Statistics on Thursday. That marked a new series record high (PPI was first reported back in 2011) but was slightly below the median …