Marketwatch EU & UK

Daily Insights
June 12, 2024

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  • The most awaited event since last week’s Nonfarm payrolls has arrived. It’s US CPI Day and the June FOMC meeting, where dovish Fed Chair Jerome Powell is estimated to signal two rate cuts in 2024.
  • The new dot plot will be the highlight of the event, where markets are expecting it to indicate two rate cuts of 25 basis point this year, compared with three rate cuts in the March dot plot.
  • Growth indicators have surprised to the downside recently since the 30 April- May 1 meeting and inflation has met expectations which leads many economists to expect Powell to sound dovish in his press conference but there is a double risk coming to this event. US CPI, if released higher than estimated can lead Powell to a more hawkish speech leading to a stronger US Dollar and vice-versa if CPI falls below estimates.
  • May’s jobs data, although surprising and confusing is likely not to spook the Fed. Non-Farm Payrolls added 272,000 jobs but unemployment rate ticked higher to 4.0%, the highest since March 2022 – the beginning of the Fed’s hiking cycle.
  • There are three more FOMC meeting left this year and if the Fed decides to start cutting, it may be in September, followed by a last cut in December. We don’t expect the Federal Reserve to cut in November given the political sensitivity of the presidential elections.
  • The US Dollar and its peers are muted this morning as investors wait for key data and the Fed’s policy decision later today. The greenback trades close to its highest since November, with the DXY trading at 105.23.

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  • The sterling is unchanged, trading at 1.2741 against the greenback despite the UK economy stagnating in April. UK GDP released this morning came in at 0%, from the previous expansion in March by 0.4%
  • EUR/GBP continues to decline for a fourth consecutive day, trading closer to 0.8430 despite disappoint UK data. Germany inflation rose by 2.8%, in line with its previous print and estimates which is weighing on the euro too. The next key support is found at 0.8400, August 2022 low.

Economic Calendar

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CNY - CPI y/y
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CNY - PPI y/y
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EUR - German Final CPI m/m
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GBP - GDP m/m
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GBP - Construction Output m/m
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GBP - Goods Trade Balance
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GBP - Index of Services 3m/3m
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GBP - Industrial Production m/m
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GBP - Manufacturing Production m/m
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CNY - New Loans
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CNY - M2 Money Supply y/y
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EUR - Eurogroup Meetings
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EUR - German 10-y Bond Auction
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GBP - NIESR GDP Estimate
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USD - Core CPI m/m
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USD - CPI m/m
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USD - CPI y/y
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USD - Crude Oil Inventories
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USD - Federal Funds Rate
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USD - FOMC Economic Projections
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USD - FOMC Statement
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USD - Federal Budget Balance
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USD - FOMC Press Conference
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CAD - BOC Gov Macklem Speaks
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EUR - German Buba President Nagel Speaks
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GBP - RICS House Price Balance
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JPY - BSI Manufacturing Index

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.84311 0.84272
gbp/usd 1.27495 1.27326
gbp/aud 1.93003 1.92444
gbp/nzd 2.07549 2.07207
usd/jpy 157.287 157.045
eur/usd 1.07462 1.07345
gbp/jpy 200.502 200.058
eur/cnh 7.81149 7.8009
usd/cnh 7.27381 7.26575
Equities and Commodities
Nasdaq 100 19248.5
DOW 38786.1
S&P 500 5384.99
BRENT CRUDE 82.4
WTI 78.48
GOLD 2316.42

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 Francisco Mioludo

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Francisco Mioludo is a trader for GPS Capital Markets at the London office. Before joining GPS, Francisco worked in Market Risk at a commodity trading firm in London where he gained valuable skills for his current role. Francisco looks after our EU and UK sales team with everything from analysis to structuring and pricing.