Not FX related but an interesting snippet reported by US media (NBC link here). 

Ukrainian forces asked the Americans about a ship sailing in the Black Sea south of Odesa, U.S. officials told NBC News. The U.S. identified it as the Moskva, officials said, and helped confirm its location, after which the Ukrainians targeted the ship.

The U.S. did not know in advance that Ukraine was going to target the Moskva, officials said, and was not involved in the decision to strike. Maritime intelligence is shared with Ukraine to help it defend against attack from Russian ships, officials added.

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The scenario for stagflation is pretty clear. ICY(somehow)MI:

central banks aggressively tighten to combat inflation … the Federal Reserve, for example, is embarking on what will be its most rapid tightening since at least 1994
global recession risk rising
War in Ukraine is ongoing and there is no end in sight to the quagmire
accompanied by the energy price shock in Europe
lockdowns in China are persisting (check out the collapse in the services PMI out yesterday … second lowest reading ever) … its 2020 all over again in China

The Bank of England nailed it, inadvertently or not, I dunno. But I suspect the MPC at the BoE are not dummies and there is no inadvertence about it:

Sterling tumbles as BOE paints dire outlook on UK economy
BOE raises bank rate by 25 bps from 0.75% to 1.00%, as expected
BOE’s Bailey: Risks to inflation are skewed to the upside
In brief from the BoE (check those links for more):

raised its cash rate by 25bps, to 1%
3 ouf of 9 MPC (Monetary Policy Committee) members voted for a 50bp hike
Governor Bailey warned he expects “a very sharp slowdown” for the economy … & a recession is a serious risk

–Get a barf bag before supply chain disruption means you can’t any more:

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Bloomberg (gated) with comments from the prior vice-chair of the Federal Reserve Richard Clarida. 
Free to speak his mind now I guess. 

Fed will need to raise short-term interest rates to at least 3.5% to bring surging inflation under control

“Expeditiously ‘getting to neutral’ will not be enough this cycle to return inflation over the forecast horizon back to the 2% longer-run goal,”
 “The funds rate will I believe ultimately need to be raised well into restrictive territory, by at least a percentage point”

Comments extracted from remarks prepared for delivery to a Hoover Institution conference on Friday. More at that gated link above. 

Bye now!

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I’ll have more details later but as a guide to who is ahead for some jaw boning on Friday:

Federal Reserve Bank of New York President John Williams
Minneapolis President Neel Kashkari
Atlanta President Raphael Bostic
Federal Reserve Governor Christopher Waller
Federal Reserve Bank of St. Louis President James Bullard
San Francisco President Mary Daly 

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ASIA: India’s central bank raised its main lending rate off record lows in a surprise move on Wednesday to contain rising inflation, shocking markets and pushing the benchmark 10-year bond yield to its highest levels in three years. The Reserve Bank of India raised the repo rate – the rate at which it lends to
The post Market Talk – May 5, 2022 first appeared on Armstrong Economics. source:

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