Marketwatch EU & UK

Daily Insights
March 7, 2024

  • The US dollar dropped against most of its G10 peers yesterday as the market focused on comments from Fed Chairman Jerome Powell as he kicked off his two-day testimony to Congress. With recent data doing little to clarify the outlook for the US economy and timing of rate cuts, Powell’s prepared comments also gave very little way. The Chairman stated that, “there’s no evidence, there’s no reason to think, that the US economy is in, or in some kind of short-term risk of, falling into recession.” Speaking about inflation, he said that the central bank was on a “good path” to achieve its hoped-for soft landing, where inflation continues to fall to its 2% target while the economy grows, and the unemployment rate remains low. “We expect inflation to come down, the economy to keep growing” adding “if that’s the case, it will be appropriate for interest rates to come down significantly over the coming years.” A June cut from the Fed is currently priced in and we will hope for further insight when Powell continues later today ahead of tomorrow’s Non-farm Payroll release.
  • The single currency gained against the greenback yesterday, with EURUSD briefly trading above the psychological 1.09 level but failing to breach recent resistance. Today’s ECB meeting is expected to pass with little fanfare and rates unchanged. Markets however will be hoping for some insight on the possible timing of the first cut when President Christine Lagarde delivers her post meeting press conference.
  • The pound followed EURUSD higher yesterday with cable currently sitting comfortably above 1.27. UK Chancellor Jeremy Hunt delivered his budget yesterday, telling MPs that the latest OBR forecasts show UK inflation falling below the 2% target in “just a few months’ time, nearly a whole year earlier than forecast.”

Economic Calendar

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AUD - Goods Trade Balance
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CNY - Trade Balance
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CNY - USD-Denominated Trade Balance
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JPY - 30-y Bond Auction
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CHF - Unemployment Rate
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EUR - German Factory Orders m/m
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GBP - Halifax HPI m/m
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CHF - Foreign Currency Reserves
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EUR - Spanish 10-y Bond Auction
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EUR - French 10-y Bond Auction
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USD - Challenger Job Cuts y/y
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EUR - Main Refinancing Rate
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EUR - Monetary Policy Statement
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CAD - Building Permits m/m
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CAD - Trade Balance
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USD - Unemployment Claims
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USD - Revised Nonfarm Productivity q/q
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USD - Revised Unit Labor Costs q/q
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USD - Trade Balance
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EUR - ECB Press Conference
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USD - Fed Chair Powell Testifies
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USD - Natural Gas Storage
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USD - FOMC Member Mester Speaks
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USD - Consumer Credit m/m
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JPY - Household Spending y/y
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JPY - Bank Lending y/y
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JPY - Current Account

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.85627 0.85572
gbp/usd 1.27403 1.27228
gbp/aud 1.93966 1.93346
gbp/nzd 2.07809 2.0712
usd/jpy 149.259 148.399
eur/usd 1.09073 1.08934
gbp/jpy 190.09 189.046
eur/cnh 7.86236 7.8506
usd/cnh 7.21294 7.20387
Equities and Commodities
Nasdaq 100 17954.4
DOW 38617.4
S&P 500 5097.29
BRENT CRUDE 82.92
WTI 79.04
GOLD 2154.11

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.