Marketwatch EU & UK

Daily Insights
March 28, 2024

  • Data released this morning confirmed that the UK suffered a technical recession after GDP for the fourth quarter came in as expected at -0.3%. Clearly the economy has struggled with high interest rates and a cost-of-living crisis – however it’s not all doom and gloom for the government in an election year. There are some green shoots, with retail sales and housing indicators showing some signs of recovery and recent monthly GDP data improving. Inflation is moving in the right direction and expected to drop below 2% in the coming months as energy bills fall. The slightly more positive outlook should allow the BoE to start to reduce interest rates in time, however the pound remains stuck in a range although is currently at the lower area of its recent range hovering just above 1.26.
  • The Japanese yen remains under the spotlight, recovering a touch from its multi-year lows against the US dollar. 152 remains a likely line in the sand and the greenback lost some ground after Federal Reserve Governor Christopher Waller said that there is no rush to lower interest rates, calling recent inflation data “disappointing.” He said that he wants to see “at least a couple of months of better inflation data” before cutting. A June cut continues to be most likely, but Fed officials remain wary of shifts in inflation and the labor market. Tomorrow’s PCE data and next week’s non-farm payroll prints will both be heavily scrutinized.
  • The single currency is a little lower this morning trading close to recent support around 1.0790-1.08. German unemployment data and retail sales are both on the docket and neither are likely to impact EURUSD too much with month ends flows likely to continue to drive markets today. Just to show how range bound EURUSD has been in 2024, January’s month end fixing rate was 1.08, February was 1.0848 and March’s fix could well be somewhere between the two.

Economic Calendar

:
AUD - MI Inflation Expectations
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NZD - ANZ Business Confidence
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AUD - Retail Sales m/m
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AUD - Private Sector Credit m/m
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EUR - German Retail Sales m/m
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GBP - Current Account
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GBP - Final GDP q/q
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GBP - Revised Business Investment q/q
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CHF - KOF Economic Barometer
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EUR - German Unemployment Change
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EUR - M3 Money Supply y/y
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EUR - Private Loans y/y
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CAD - GDP m/m
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USD - Final GDP q/q
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USD - Unemployment Claims
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USD - Final GDP Price Index q/q
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USD - Chicago PMI
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USD - Pending Home Sales m/m
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USD - Revised UoM Consumer Sentiment
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USD - Revised UoM Inflation Expectations
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USD - Natural Gas Storage
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NZD - Bank Holiday
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AUD - Bank Holiday
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JPY - Tokyo Core CPI y/y
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JPY - Unemployment Rate
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JPY - Prelim Industrial Production m/m
:
JPY - Retail Sales y/y

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.85705 0.85657
gbp/usd 1.2637 1.26108
gbp/aud 1.9364 1.93134
gbp/nzd 2.10889 2.10393
usd/jpy 151.544 151.249
eur/usd 1.08266 1.08078
gbp/jpy 191.252 190.761
eur/cnh 7.875 7.8386
usd/cnh 7.26054 7.24333
Equities and Commodities
Nasdaq 100 18301.2
DOW 39790.3
S&P 500 5256.78
BRENT CRUDE 85.75
WTI 81.81
GOLD 2195.45

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

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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.