MSB | Foreign Exchange & Finance

𝐂𝐞𝐧𝐭𝐫𝐚𝐥 𝐛𝐚𝐧𝐤 𝐢𝐧𝐝𝐞𝐩𝐞𝐧𝐝𝐞𝐧𝐜𝐞 𝐢𝐬 𝐛𝐚𝐜𝐤 𝐢𝐧 𝐟𝐨𝐜𝐮𝐬. Former Fed Chair Jerome Powell has warned that the Federal Reserve’s credibility could be damaged if presidents are able to remove officials over policy disagreements. His message was clear: trust in monetary policy depends on independence, stability and respect for the rule of law. For markets, this matters. Any uncertainty around the Fed’s independence can influence investor confidence, rate expectations and currency stability. Source: Bloomberg

📰 𝐅𝐗 𝐅𝐑𝐈𝐃𝐀𝐘 𝐑𝐎𝐔𝐍𝐃 𝐔𝐏 📰 𝐎𝐢𝐥 𝐌𝐚𝐫𝐤𝐞𝐭𝐬 𝐑𝐞𝐦𝐚𝐢𝐧 𝐕𝐨𝐥𝐚𝐭𝐢𝐥𝐞 Oil prices moved sharply this week as markets reacted to shifting hopes of a US-Iran peace deal and uncertainty around the Strait of Hormuz. Brent crude fell below $100 earlier in the week, before remaining sensitive to further headlines. - Any progress on a deal could ease inflation pressure globally - Ongoing disruption keeps energy markets highly sensitive - Higher oil prices remain a key risk for GBP, USD and EUR outlooks 𝐔𝐒 𝐈𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧 𝐏𝐮𝐭𝐬 𝐏𝐫𝐞𝐬𝐬𝐮𝐫𝐞 𝐎𝐧 𝐓𝐡𝐞 𝐅𝐞𝐝 US PCE inflation rose to 3.8% in April, up from 3.5% in March, keeping inflation well above the Federal Reserve’s 2% target. - Stronger inflation could delay future rate cuts - The dollar weakened after mixed US data - Q1 GDP was revised down to 1.6%, pointing to slower growth momentum 𝐔𝐊 𝐂𝐨𝐧𝐬𝐮𝐦𝐞𝐫𝐬 𝐅𝐚𝐜𝐞 𝐇𝐢𝐠𝐡𝐞𝐫 𝐏𝐫𝐢𝐜𝐞𝐬 UK households are expected to face higher prices over the coming months, with retailers warning that energy, shipping and raw material costs are feeding through to consumers. - Shop price inflation rose to 1.2% in May - Businesses are still facing higher energy and supply chain costs - Persistent price pressure could complicate the Bank of England’s next move 𝐄𝐮𝐫𝐨𝐩𝐞𝐚𝐧 𝐈𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧 𝐁𝐚𝐜𝐤 𝐈𝐧 𝐅𝐨𝐜𝐮𝐬 Inflation concerns are building again across Europe, with French inflation rising to 2.8% in May and Spain’s inflation also edging higher. This has added to expectations that the ECB may need to stay cautious on rates. - Energy costs remain a major driver - Any shift in ECB expectations could impact EUR strength Have a lovely weekend !

𝐅𝐫𝐞𝐧𝐜𝐡 𝐚𝐧𝐝 𝐒𝐩𝐚𝐧𝐢𝐬𝐡 𝐢𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧 𝐣𝐮𝐦𝐩𝐬, 𝐬𝐭𝐫𝐞𝐧𝐠𝐭𝐡𝐞𝐧𝐢𝐧𝐠 𝐭𝐡𝐞 𝐜𝐚𝐬𝐞 𝐟𝐨𝐫 𝐚𝐧 𝐄𝐂𝐁 𝐡𝐢𝐤𝐞. Fresh data shows price pressures rising again: • France: 2.8% • Spain: 3.6% • ECB target: 2% With energy costs adding pressure, markets now expect the ECB to raise rates in June. For businesses, this matters. Higher rates can affect borrowing costs, investor confidence and currency movements, all of which feed into planning, payments and FX exposure. Source: Bloomberg

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𝐂𝐞𝐚𝐬𝐞𝐟𝐢𝐫𝐞 𝐢𝐧 𝐩𝐥𝐚𝐜𝐞. 𝐌𝐚𝐫𝐤𝐞𝐭𝐬 𝐬𝐭𝐢𝐥𝐥 𝐨𝐧 𝐞𝐝𝐠𝐞. Fresh US strikes near the Strait of Hormuz have shown just how fragile the situation remains, even as talks with Iran continue. With a key global energy route still disrupted, oil and gas prices remain under pressure, and businesses are once again being reminded how quickly external shocks can affect costs, confidence and currency markets. At MSB | Foreign Exchange & Finance, we help businesses make sense of market uncertainty and plan their FX strategy with clarity. Source: Bloomberg

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𝐔𝐊 𝐞𝐧𝐞𝐫𝐠𝐲 𝐛𝐢𝐥𝐥𝐬 𝐚𝐫𝐞 𝐫𝐢𝐬𝐢𝐧𝐠 𝐚𝐠𝐚𝐢𝐧. From 1 July, the energy price cap will rise 13% to £1,862. • Higher wholesale gas and power costs • Ongoing conflict in Iran • Concerns over key energy routes • Added pressure on inflation and interest rates For businesses, it’s another reminder that global volatility can quickly impact costs, cash flow and FX exposure. Planning ahead matters. Source: Bloomberg

The bank holiday is over. The team is back. The rates are moving. The air con, however, is still very much slow to start after the long weekend. For all things FX and finance, you know where to find us. 📩 info@msb-fx.com 📞 +44 (0)203 143 0199

𝐅𝐫𝐞𝐬𝐡 𝐬𝐭𝐫𝐢𝐤𝐞𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐒𝐭𝐫𝐚𝐢𝐭 𝐨𝐟 𝐇𝐨𝐫𝐦𝐮𝐳 𝐡𝐚𝐯𝐞 𝐩𝐮𝐭 𝐦𝐚𝐫𝐤𝐞𝐭 𝐮𝐧𝐜𝐞𝐫𝐭𝐚𝐢𝐧𝐭𝐲 𝐛𝐚𝐜𝐤 𝐢𝐧 𝐟𝐨𝐜𝐮𝐬. US and Israeli jets reportedly hit Iranian vessels and other targets, just hours after President Trump suggested talks with Tehran were progressing. Oil prices climbed as optimism around a ceasefire and reopening of the strait weakened. For businesses, it’s another reminder that geopolitical risk can move quickly. Energy prices. Inflation expectations. Currency markets. They’re all connected. At MSB | Foreign Exchange & Finance, we help businesses plan for that uncertainty with FX strategies designed to protect margins and support confident decision-making. Source: Bloomberg

📰 𝐅𝐗 𝐅𝐑𝐈𝐃𝐀𝐘 𝐑𝐎𝐔𝐍𝐃 𝐔𝐏 📰 𝐔𝐊 𝐈𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧 𝐄𝐚𝐬𝐞𝐬 𝐭𝐨 𝟐.𝟖% UK inflation cooled in April, with CPI falling to 2.8% from 3.3% in March - its lowest level since March 2025. - CPIH also fell to 3.0%, down from 3.4% - Core CPI eased to 2.5%, suggesting underlying price pressure is softening - Lower inflation could support expectations for future BoE rate cuts 𝐔𝐊 𝐉𝐨𝐛𝐬 𝐌𝐚𝐫𝐤𝐞𝐭 𝐖𝐞𝐚𝐤𝐞𝐧𝐬 The latest labour market data showed wage growth slowing, vacancies falling, and unemployment at 5.0% in January to March 2026. - Regular pay growth slowed to 3.4% - Vacancies fell to 705,000, continuing the downward trend - The broader labour market picture suggests conditions are softening - Adds to the case for the BoE to consider loosening policy if growth weakens further 𝐔𝐊 𝐑𝐞𝐭𝐚𝐢𝐥 𝐒𝐚𝐥𝐞𝐬 𝐅𝐚𝐥𝐥 𝐒𝐡𝐚𝐫𝐩𝐥𝐲 Retail sales volumes fell by 1.3% in April, the largest monthly fall since May 2025. - Fuel sales dropped 10.2%, the sharpest decline since November 2020 - Sales excluding fuel still fell by 0.4% - Clothing sales were down 2.4%, reflecting weaker demand and price sensitivity - Softer consumer spending points to pressure on UK growth 𝐔𝐒-𝐈𝐫𝐚𝐧 𝐓𝐞𝐧𝐬𝐢𝐨𝐧𝐬 𝐊𝐞𝐞𝐩 𝐎𝐢𝐥 𝐌𝐚𝐫𝐤𝐞𝐭𝐬 𝐎𝐧 𝐄𝐝𝐠𝐞 Oil prices remained sensitive to US-Iran negotiations, with Brent crude trading around $107 as mixed signals continued to fuel doubts over a near-term deal. - Brent rose more than 2% amid renewed supply concerns - Safe-haven demand has helped support the US dollar - Higher oil prices risk keeping inflation pressure alive - Businesses with USD exposure should stay alert to renewed FX volatility Have a lovely weekend !