Marketwatch EU & UK

Daily Insights
January 11, 2024

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  • John Williams, the Federal Reserve Bank of New York yesterday said that monetary policy is now tight enough to nudge inflation back to the central bank’s target, however he suggested that officials need more evidence of cooling inflation before cutting interest rates. He said, “I expect that we will need to maintain a restrictive stance of policy for some time to fully achieve our goals, and it will only be appropriate to dial back the degree of policy restraint when we are confident that inflation is moving toward 2% on a sustained basis.”
  • The recent rhetoric of ‘higher for longer’ appears to still be in place with the Fed expected to hold interest rates unchanged when they meet later this month, giving policymakers time to evaluate the economy after aggressively raising rates from just above zero to over 5%. Markets continue to speculate as to when the first interest rate cut will come, with many suggesting rates will be left unchanged until around June, however a March cut cannot be ruled out.
  • We will look for more clues on the timing of possible Fed easings, as markets eagerly await the release of the December CPI report later today. The headline inflation rate is expected to tick up to 0.2%, boosting the annual rate to 3.2% from the previous 3.1%.

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  • Both the pound and the euro posted gains against the greenback with the dollar index dropping a touch whilst remaining within its recent narrow range. EURUSD is consolidating just below the psychological 1.10 level and cable is sitting close to its recent high of 1.2771 with both seeking direction from this afternoon’s data release.

Economic Calendar

AUD - Goods Trade Balance
JPY - Leading Indicators
EUR - ECB Economic Bulletin
EUR - Italian Industrial Production m/m
CNY - New Loans
CNY - M2 Money Supply y/y
GBP - Housing Equity Withdrawal q/q
USD - Core CPI m/m
USD - CPI m/m
USD - CPI y/y
USD - Unemployment Claims
USD - Natural Gas Storage
USD - 30-y Bond Auction
USD - Federal Budget Balance
JPY - Bank Lending y/y
JPY - Current Account

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.86106 0.85987
gbp/usd 1.27741 1.27442
gbp/aud 1.90211 1.89834
gbp/nzd 2.04657 2.04109
usd/jpy 145.778 145.279
eur/usd 1.09884 1.09729
gbp/jpy 185.849 185.427
eur/cnh 7.8834 7.8652
usd/cnh 7.18376 7.16289
Equities and Commodities
Nasdaq 100 16872
DOW 37802.1
S&P 500 4799.16
WTI 71.96
GOLD 2034.92

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.