Welcome to the latest edition of THE TREASURY HUB Banking and Treasury Markets Bulletin of 2021. Domestically and internationally, there is increased focus on the speed of the economic recovery as a result of the vaccine rollout.
As we referenced in the previous bulletin, the exit of KBC and Ulster Bank from the banking market leaves a duopoly of AIB and Bank of Ireland unless PTSB can scale up quickly. We continue to monitor this. Hospitality finally gets a chance to re-open but anecdotal evidence is that some accounting firms are beginning to gear up their insolvency practices as they expect the gradual scaling back of Covid-related assistance to exposure those that have an underlying business weakness.
On the currency front, GBP has strengthened again and currently sits below 86p. Meanwhile USD is marginally stronger than at the start of the year but shows no real sign of breaking back down through EUR/USD 0.8500 on a sustained basis. Interest rates have eased back a small bit over the past month but markets remain undecided as to whether inflation increases are a temporary or long-term phenomenon. Economic data, in general, continues to improve.
From an investment perspective, the heat has gone out of the NASDAQ (Tesla 30% off its peak) but both ISEQ and FTSE are well up on the year to date.