To start the morning off Q4 GDP YoY for the UK came in at 6.6% vs expectations of 6.5% boosting the pound against both the euro and dollar.

Newfound optimism on the Russia-Ukraine ceasefire and peace talks quickly came to a halt after Russia indicated no material progress had been made. U.S equities shaved off gains made yesterday closing lower along with the European market whilst the FTSE was flat.

Europe’s strongest economy Germany had a surge in inflation YoY printing 7.3% over March. Traders now bet the ECB will hike its deposit rate from negative 50bps to zero two months earlier than expected with Christine Lagarde stating that “The longer the war lasts, the greater the costs are likely to be”. As a result, we saw the euro gain against the dollar pushing through the 1.1140 level and taking the pound euro to new year lows around 1.1770. Oil and natural gas were back in the green following further attacks in Ukraine and on worries that citizens in Western Europe may be forced to ration fuel.

For the dollar, ADP non-farm payroll, which represents private-sector employment, came in above expectations at 455k vs 450k expectations. We saw a surge in employment in the services sector as covid measures ease. To round up Q4 for the U.S GDP data came in at 6.9% vs forecasts of 7.1% expansion, the dollar slipped lower propping cable up to 1.3140.

We have initial jobless claims release in the afternoon followed by FOMC member Williams speaking. With non-farm payroll tomorrow that is the piece of data to re-affirm the message of how the U.S labour market is tight and can withstand monetary tightening or if there are any gaps in their plans.