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European session review: GBP mostly lower, weighed down by bond sell-off and inflation fears

TimeCountryEventPeriodPrevious valueForecastActual
07:45FranceCPI, m/mFebruary0.2%-0.3%-0.1%
07:45FranceCPI, y/yFebruary0.6%0.3%0.4%
07:45FranceConsumer spending January22.4%-3.5%-4.6%
07:45FranceGDP, q/qQuarter IV18.7%-1.3%-1.4%
08:00SwitzerlandGross Domestic Product (YoY)Quarter IV-1.4%-2.1%-1.6%
08:00SwitzerlandKOF Leading IndicatorFebruary96.596.6102.7
08:00SwitzerlandGross Domestic Product (QoQ) Quarter IV7.6%0%0.3%
12:30United KingdomMPC Member Ramsden Speaks    

GBP retreated against most of its major counterparts in the European session on Friday as expectations of improving economic conditions and fears of accelerating inflation triggered a sell-off in global bond markets, sending yields to pre-pandemic levels. Market participants increasingly have become worried that faster inflation could prompt the central banks to hike interest rates as well. 

The yield on the benchmark 10-year U.S. Treasury notes briefly jumped as high as 1.6% on Thursday, their highest level since February 2020, but then backpedaled somewhat. The 10-year yield is now holding near 1.48%, up more than 50 basis points since the year started.

The Bank of England's (BoE) chief economist Andy Haldane acknowledged on Friday that "there is a tangible risk inflation proves more difficult to tame", which could force policymakers to "act more assertively than is currently priced into financial markets". 

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