Marketwatch EU & UK

Daily Insights
May 17, 2024

  • Currency markets continue to be driven by the outlook for the US economy along with the timing and size of future rate cuts from the Fed. The central bank continues to follow the data, with inflation and the labor markets the key drivers that will determine when rate setters on the FOMC will pull the trigger on the first cut of the cycle. We had two Fed speakers on the wires yesterday, both saying the central bank should keep borrowing costs high and wait for further evidence that inflation is easing, suggesting that they are not in a rush to cut rates. Cleveland Fed President Loretta Mester said, “Incoming economic information indicates that it will take longer to gain that confidence” adding, “Holding our restrictive stance for longer is prudent at this point as we gain clarity about the path of inflation.” Her comments were back up by John Williams the New York Fed President who said, “I don’t expect to see that greater confidence that we need to see on the inflation progress towards a 2% goal in the very near term.” Fed officials, including Chairman Powell have been very measures in their recent Fed speak, continuing to be patient and banging the same drum suggesting that they will not act until inflation is on the right path to their 2% goal. Markets, as always, are less patient and following a small tick lower in this week’s CPI report, Fed futures markets now price two 25bp cuts from the Fed this year.
  • We have eurozone final April CPI on the docket this morning, with markets looking for an unchanged 2.4% print to keep the chances of a June ECB cut alive. EURUSD remains elevated in the high 1.08’s with resistance at 1.09 currently holding.

Economic Calendar

CNY - New Home Prices m/m
CNY - Industrial Production y/y
CNY - Retail Sales y/y
CNY - Fixed Asset Investment ytd/y
CNY - NBS Press Conference
CNY - Unemployment Rate
CNY - Foreign Direct Investment ytd/y
GBP - MPC Member Mann Speaks
EUR - Final Core CPI y/y
EUR - Final CPI y/y
CAD - Foreign Securities Purchases
USD - CB Leading Index m/m
USD - FOMC Member Waller Speaks
USD - FOMC Member Daly Speaks

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.85802 0.85755
gbp/usd 1.26723 1.26522
gbp/aud 1.90036 1.89598
gbp/nzd 2.07239 2.06801
usd/jpy 155.926 155.347
eur/usd 1.08687 1.08542
gbp/jpy 197.33 196.792
eur/cnh 7.8528 7.8417
usd/cnh 7.23284 7.22137
Equities and Commodities
Nasdaq 100 18580.2
DOW 39856.1
S&P 500 5299.98
WTI 79.34
GOLD 2379.29

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.