UK is in focus with Rightmove data highlighting a house price rise.
In early trade today, UK market appear befuddled, scrambling for direction as we enter a new week of corporate and economic turmoil. Today marks a delayed start due to the lack of a US influence. With the MLK holiday causing the Q4 earnings season to stall after the big banks fired the starting gun on Friday.
The dollar appears to have gained a more steady footing recently. With markets being quite volatile. Despite the fact that Both the Nasdaq and the Dow have reached new highs. Nonetheless, it only tells half the picture, as market expectations for Federal Reserve monetary easing look increasingly implausible. Owing to an inflation outlook that looks highly unlikely to reach the 2% target by the time the FOMC meets in March. Given the strong economic climate and 3.4% inflation rate, market expectations for seven rises in seven sessions beginning in March appear exceedingly unrealistic.
Qatar reroutes LNG exports, the Red Sea difficulties persist.
Concerns over passage across the Red Sea remain in the market following last week’s US/UK-led attack on Houthi forces in Yemen. The weekend decision by Qatar to cease delivering LNG vessels via the straight highlights the persistent difficulties to the system. the energy market, with European central bankers likely to remain cautious about the possibility of gas logistical problems given their recent shift away from Russian pipeline supplies.
This week’s focus is on the United Kingdom, which will surely be dominated by Wednesday’s inflation report. Wage data anticipated on Tuesday serves as a reminder of the high underlying pressures being faced by UK firms. With last time’s 7.2% average wages figure standing in stark contrast to the 3.9% CPI figure. Markets are presently pricing in five rate cuts from the Bank of England this year. Following the expected first dovish shift at the May meeting. Today’s UK statistics has focused on the housing sector. With Rightmove reporting a 1.3% increase. House prices are rising at their fastest rate in eight months. Crucially, the BoE’s dovish tilt has helped push down mortgage rates, and it is obvious that sentiment in the housing market has finally turned a corner.
