Marketwatch EU & UK

Daily Insights
January 26, 2024

  • flag european union 1f1ea 1f1faAs widely expected, the ECB kept its key interest rate unchanged at the first policy meeting of the year, with President Christine Lagarde pushing back on the markets aggressive pricing of early rate cuts. When questioned about the timing of cuts, she said, “I stand by what I have said”, referring to previous suggestions that the central bank remains data dependant and that summer cuts are likely. She added “We stand ready to adjust all of our instruments within our mandate to ensure that inflation returns to our medium-term target, and to preserve the smooth functioning of monetary policy transmission.” As regularly occurs, rates markets have been pricing in aggressive early cuts, with swaps pricing an April move by the ECB, despite ongoing caution from central bank officials who have previously stated that cuts were not even discussed at the last policy meeting.
  • flag united states 1f1fa 1f1f8Solid US data released yesterday suggests that a soft landing is on the horizon after GDP QoQ came in above consensus at 3.3% versus expectations of 2.0%, helping to boost the US dollar against its G10 peers. Both the pound and the euro slipped against the greenback, with EURUSD dropping below the 200-day MA which has provided solid support to consolidate around 1.0820 at the time of writing. GBPUSD also lost ground, falling below the psychological 1.27, with markets expected to tread water this morning ahead of key US data this afternoon. The Personal Income and spending data, which is the Fed’s preferred inflation gauge is likely to provide encouraging inflation news for the Fed ahead of next week’s FOMC policy meeting.

Economic Calendar

GBP - GfK Consumer Confidence
EUR - German GfK Consumer Climate
EUR - Spanish Unemployment Rate
EUR - M3 Money Supply y/y
EUR - Private Loans y/y
EUR - German Buba Monthly Report
USD - Core PCE Price Index m/m
USD - Personal Income m/m
USD - Personal Spending m/m
USD - Pending Home Sales m/m

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.8536 0.85304
gbp/usd 1.2716 1.26971
gbp/aud 1.93142 1.92633
gbp/nzd 2.08219 2.07933
usd/jpy 147.849 147.476
eur/usd 1.08489 1.08366
gbp/jpy 187.841 187.419
eur/cnh 7.79251 7.7779
usd/cnh 7.18661 7.17407
Equities and Commodities
Nasdaq 100 17390.9
DOW 37928
S&P 500 4878.69
WTI 76.83
GOLD 2022.22

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.

About Simon Walker


Simon Walker is head of the GPS Capital Markets trade desk in our London office where he is responsible for covering market risk in European hours. He has over 25 years’ experience in foreign exchange, working in both sales and trading.