Marketwatch EU & UK

Daily Insights
September 15, 2023

The US dollar is set to finish today with the first weekly loss in nine weeks ahead of University Michigan survey that will help investors understand how stubborn inflation is becoming. USD/JPY continues to trade mid 147-148 and EUR/USD is steady after dropping to a six-month low Thursday. GBP/USD is trading higher this morning, holding above 1.24. AUD/USD advances to a 10-day high around 0.6470.

The European Central Bank decided to lift interest rates by 25 basis points, its 10th consecutive hike and expressed concerns about inflation staying higher for longer. While many economists see this as the last hike and called it a “dovish hike”, ECB President Christine Lagarde was not able to confirm if rates have reached their peak yet at 4%. The euro fell to its lowest level since May and bonds rallied.

It makes sense, from a guidance perspective, to say that the ECB is probably done with its hiking cycle.  Underlying inflation is easing, business surveys keep delivering warnings of a deterioration in activity and there is a weak credit availability.

US producer prices increased in August by the most in more than one year, driven by rising energy and transportation costs. The PPI for final demand advanced 0.7% in August, with the price at the gas pump surging 20% being the main driver. Excluding food and energy, the PPI rose 0.2%.

The Federal Reserve is set to meet next week, where a “hawkish pause” is priced in, leaving the door open for another Fed hike this year, following US Core CPI picking up and now PPI numbers also registering the same trajectory.

 

Have a good weekend.

Economic Calendar

2:00am:
CNY - Industrial Production y/y
2:00am:
CNY - Retail Sales y/y
2:00am:
CNY - Fixed Asset Investment ytd/y
2:00am:
CNY - NBS Press Conference
2:00am:
CNY - Unemployment Rate
4:30am:
JPY - Tertiary Industry Activity m/m
6:45am:
EUR - French Final CPI m/m
8:30am:
GBP - Consumer Inflation Expectations
9:00am:
EUR - Trade Balance
9:00am:
EUR - Italian Trade Balance
9:15am:
EUR - ECOFIN Meetings
9:15am:
EUR - Eurogroup Meetings
9:45am:
EUR - ECB President Lagarde Speaks
12:30pm:
CAD - Foreign Securities Purchases
12:30pm:
CAD - Manufacturing Sales m/m
12:30pm:
USD - Empire State Manufacturing Index
12:30pm:
USD - Import Prices m/m
1:15pm:
USD - Industrial Production m/m
1:15pm:
USD - Capacity Utilization Rate
2:00pm:
USD - Prelim UoM Consumer Sentiment
2:00pm:
USD - Prelim UoM Inflation Expectations

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.85821 0.85689
gbp/usd 1.24336 1.23994
gbp/aud 1.92858 1.91977
gbp/nzd 2.10084 2.09326
usd/jpy 147.707 147.338
eur/usd 1.06674 1.06331
gbp/jpy 183.517 182.767
eur/cnh 7.7605 7.7272
usd/cnh 7.29524 7.25657
Equities and Commodities
Nasdaq 100 15515.8
DOW 35016.5
S&P 500 4518.1
BRENT CRUDE 94.13
WTI 90.7
GOLD 1916.33

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

author-headshot

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.