Movements in G10 currencies were muted last night.
Overview
Equity futures are in the green today but remain at the mercy of Russia/Ukraine headline risk. Russian Foreign Minister Sergei Lavrov agreed to meet U.S. Secretary of State Antony Blinken in Europe next week. Drills along the border are set to finish on Sunday and the U.S. continues to warn that an invasion is still “very high.”Later, there is a slew of Fed speakers throughout the day in New York. Chicago Fed President Charles Evans and Fed Governor Christopher Waller take part in a panel at 10:45 a.m. Fed Governor Lael Brainard will speak at 1:30 p.m. New York Fed President John Williams will speak at a separate event at 11 a.m. Traders will continue to monitor policy maker’s wording for clues on the pace of future interest rate hikes. After ramping up bets the Fed would hike rates 50 bp in March, odds are falling slightly. We still see it has a “toss-up.”
What to Watch Today…
- Various Fed Speakers throughout the day
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GBP
The British pound rose against the U.S. dollar overnight, testing monthly highs. The jump came following a report that showed U.K. retail sales bounced back in January as the effects of Omicron waned. The volume of goods sold in stores and online added 1.9% to sales, after falling 4.0% in December. The relatively strong data will likely add to the narrative that the economy is strong enough to absorb another rate hike from the Bank of England next month. Despite the early pop, the sterling has given back all those gains in early trading.
CAD
The Canadian was mostly flat overnight despite the price of oil lagging. WTI crude futures are down 2.3% this morning, its second day of losses. Oil is heading towards its first weekly loss in two months despite the ongoing tensions along the Russian/Ukrainian border. The loonie hasn’t made any significant moves following data that showed retail sales were not as bad as estimated. Total retail sales fell 1.8%, according to Statistics Canada. Expectations were for a 2.1% decline.
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