Marketwatch EU & UK

Daily Insights
February 7, 2024

  • flag united states 1f1fa 1f1f8After a few days of solid gains, the US dollar pulled back from its strongest level in over two months as treasuries rallied dropping yields across the curve. The dollar index slipped a touch after posting gains following solid US data at the end of last week with the 2-year and 10-year yields dropping by around 7bps. With markets and the Fed continuing to data watch, Fed speak remains a key driver and we heard from two officials yesterday, who both urged caution, pushing back on early cuts. Cleveland Fed President Loretta Mester said that policymakers will probably gain confidence to cut interest rates “later this year” if the economy evolves as expected but added that she doesn’t see a need to rush. Separately, Minneapolis Fed President Neel Kashkari celebrated the improving inflation outlook saying, “we’re not all the way there yet, but we’ve made a lot of progress on inflation.” The FOMC has kept rates on hold since last July and continue to suggest that the next move will be a cut, with markets previously expecting a March move. The recent strong data and comments from the last policy meeting now suggest the first move in May or June, with three cuts pencilled in this year.
  • flag european union 1f1ea 1f1faEURUSD continues to consolidate in the mid 1.07 area, well supported by the recent low around 1.0725 – a level that needs to break before a further test lower. Ahead this morning we look forward to German Industrial Production data, where markets will look for more clues on the outlook for the industry sector of the euro-area’s largest economy.
  • flag united kingdom 1f1ec 1f1e7The only MPC member to vote for a cut at the last policy meeting, yesterday said that policymakers are underestimating “downside risks” to the economy. Swati Dhingra was the first member of the nine-member panel to vote for a cut since the outset of the pandemic almost four years ago and added, “I’m not fully convinced there’s some kind of really sharp excess demand in the economy coming from the consumption side.” Her comments did little to shift cable which continues to tread water in the mid 1.26 area, whilst EURGBP remains locked between 0.85 and 0.8550.

Economic Calendar

JPY - 30-y Bond Auction
JPY - Leading Indicators
CHF - Unemployment Rate
EUR - German Industrial Production m/m
GBP - Halifax HPI m/m
EUR - French Prelim Private Payrolls q/q
EUR - French Trade Balance
CHF - Foreign Currency Reserves
GBP - MPC Member Breeden Speaks
EUR - Italian Retail Sales m/m
CAD - Trade Balance
USD - Trade Balance
USD - Crude Oil Inventories
USD - FOMC Member Kugler Speaks
USD - FOMC Member Barkin Speaks
USD - 10-y Bond Auction
CAD - BOC Summary of Deliberations
USD - FOMC Member Bowman Speaks
USD - Consumer Credit m/m
JPY - Bank Lending y/y
JPY - Current Account

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.85399 0.85343
gbp/usd 1.26129 1.25968
gbp/aud 1.93159 1.92819
gbp/nzd 2.06818 2.06272
usd/jpy 148.063 147.713
eur/usd 1.07672 1.07559
gbp/jpy 186.618 186.261
eur/cnh 7.75279 7.7353
usd/cnh 7.20506 7.18797
Equities and Commodities
Nasdaq 100 17583.3
DOW 38543.9
S&P 500 4957.9
WTI 73.39
GOLD 2033.39

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.