Financial markets review by Lloyds TSB

Sterling faced strong selling pressure this week. Most of the weakness occurred in the first half as speculators sold sterling ahead of the Bank of England’s Quarterly Inflation Report (QIR).

Yields plummet on dovish BoE QIR and weak US data

Sterling faced strong selling pressure this week. Most of the weakness occurred in the first half as speculators sold sterling ahead of the Bank of England’s Quarterly Inflation Report (QIR).

Government bond yields and swap rates in the UK, the US and the euro zone posted sharp falls this week, spurred by the dovish BoE Quarterly Inflation Report (QIR) and weaker than expected US and euro zone CPI data.

The Norwegian krone has found support as the central bank indicates that interest rates may have to rise sooner than thought.

Emerging market currencies have broadly fallen against the USD. The Turkish lira underperformed as economic data disappointed.

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