IFX Market Report: Friday 9th December 2022

The UK Government has announced what they describe as the biggest shake up in decades of banking financial regulations. The move comes as the government look to tear down the red tape that was present before Brexit, with the hope that we attract more investment into the banking sector and turbocharge growth. Chancellor Jeremy Hunt said the changes would secure "the UK's status as one of the most open, dynamic and competitive financial services hubs in the world". The reforms "seize on our Brexit freedoms to deliver an agile and home-grown regulatory regime that works in the interest of British people and our businesses".

Some analysts are optimistic about the move, however some believe that we maybe forgetting the pickle the banks got themselves in between 2007 and 2009 when the then Labour government spent £137bn of public money to bail out banks.

The pound has remained range bound against the dollar this week bouncing between 1.2150 and 1.2250, but has moved down slightly to 1.1590 against the Euro as Eurozone GDP for Q3 came in a little better than expected on Wednesday as it posted a 0.3% compared to 0.2% expected. The Euro also pressed higher against the dollar and currently resides around 1.0550.

Financial markets currently price in a 78% chance that the BoE will raise rates by half a percentage point to 3.5% on Dec. 15, and a 22% chance of a rise to 3.75%

Data release is limited today with the only two major releases being US PPI and US Consumer Sentiment.

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