Marketwatch EU & UK

Daily Insights
August 21, 2023

Markets continue to trade in summer mode, with price action being driven by headlines out of China and US treasury yields. China continues to make efforts to boost its economy and surprised markets overnight by keeping its 5-year loan rate unchanged while agreeing a small cut to the 1-year rate with markets hoping for more.

The single currency remains on the backfoot with EURUSD struggling to move above 1.09 after data released this morning showed that German producer prices fell more than expected in July. This week we look forward to the release of key PMI surveys which will likely provide fresh insight into the impact of recent ECB tightening on the economy. The headline reading fell in July from June and is expected to fall further, suggesting that GDP growth was decelerating at the start of the quarter. The euro area economy is heavily reliant on China, so recent challenges out of China will likely further impact the outlook in the bloc. Elevated inflation remains a headache for the ECB, and signs that growth is slowing are unlikely to prevent the central bank from hiking again, with a final 0.25% increase likely in September.

It is a fairly quiet week for US data, with home sales data in the coming days, ahead of Durable Goods and Initial claims due out on Thursday. On Friday, the attention shifts to Fed Chairman Jerome Powell’s speech at the Jackson Hole symposium. Markets expect Powell to emphasize the need to keep interest rates higher for longer as the central bank continues to battle inflation.

Have a good week.

Economic Calendar

CNY - 1-y Loan Prime Rate
CNY - 5-y Loan Prime Rate
NZD - Credit Card Spending y/y
EUR - German PPI m/m
EUR - German Buba Monthly Report
CAD - NHPI m/m

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.85444 0.84931
gbp/usd 1.27504 1.27079
gbp/aud 1.9917 1.97691
gbp/nzd 2.15518 2.13777
usd/jpy 145.626 145.1
eur/usd 1.08873 1.08561
gbp/jpy 185.467 184.273
eur/cnh 7.9764 7.93586
usd/cnh 7.3327 7.2975
Equities and Commodities
Nasdaq 100 14694
DOW 34501
S&P 500 4367.49
WTI 81.76
GOLD 1888.95

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.