Treasury yields in the US continued their climb higher with the 10-year hitting the highest level since 2007. The moved pulled the US dollar higher once again, although risk appetite remains mixed as traders wrestle the current geopolitical concerns over rising yields. Markets will be looking for further clues on the US outlook later today as we await the release of weekly jobless claims, Philly Fed Business Outlook, and a plethora of Fed speakers. However, this evening’s main event will be a speech from Fed Chairman Jerome Powell, who speaks at the Economic Club of New York. The Chairman is likely to continue recent ‘higher for longer’ rhetoric suggesting that interest rates are at or near the peak.
The single currency remains rangebound, with EURUSD capped around 1.06 and consolidating in the low 1.05’s. Yesterday’s final estimate for eurozone inflation came out inline with expectations, barely moving the pair, with ongoing geopolitical headlines and treasury yields currently dictating the outlook. EURUSD remains below both the 50 and 200-day MA, affirming a bearish signal with the pair likely to drift lower with a break of the psychological 1.05 area opening a test of 1.0450.
The pound failed to hold on to its initial post UK CPI gain yesterday, with GBPUSD running in to offers above 1.22. There are a swathe of option strikes around 1.22 which are also keeping a cap on the pair as traders sell to defend the level. The bias remains to the downside, with recession fears increasing based on a combination of elevated interest rates and sticky inflation. Initial support sits at 1.21, and a breach of this level brings 1.2050 and 1.1955 into play.
Marketwatch EU & UK
Daily insights into the latest global market news
Daily Insights
October 19, 2023
Economic Calendar
19 Oct 2023
12:30am:
AUD - Employment Change
12:30am:
AUD - Unemployment Rate
12:30am:
AUD - NAB Quarterly Business Confidence
1:30am:
CNY - New Home Prices m/m
4:30am:
AUD - RBA Annual Report
6:00am:
CHF - Trade Balance
7:02am:
CNY - Foreign Direct Investment ytd/y
8:00am:
EUR - Current Account
9:03am:
EUR - Spanish 10-y Bond Auction
12:30pm:
CAD - IPPI m/m
12:30pm:
CAD - RMPI m/m
12:30pm:
USD - Unemployment Claims
12:30pm:
USD - Philly Fed Manufacturing Index
1:00pm:
USD - FOMC Member Jefferson Speaks
2:00pm:
USD - Existing Home Sales
2:00pm:
USD - CB Leading Index m/m
2:30pm:
USD - Natural Gas Storage
4:00pm:
USD - Fed Chair Powell Speaks
5:20pm:
USD - FOMC Member Goolsbee Speaks
5:30pm:
USD - FOMC Member Barr Speaks
6:05pm:
USD - Federal Budget Balance
9:30pm:
USD - FOMC Member Harker Speaks
9:45pm:
NZD - Trade Balance
11:00pm:
USD - FOMC Member Logan Speaks
11:01pm:
GBP - GfK Consumer Confidence
11:30pm:
JPY - National Core CPI y/y
Market Indicators
Currency Pairs
| Pair | High | Low |
| eur/gbp | 0.86936 | 0.86774 |
| gbp/usd | 1.21457 | 1.2111 |
| gbp/aud | 1.92738 | 1.91625 |
| gbp/nzd | 2.08293 | 2.07301 |
| usd/jpy | 149.841 | 149.667 |
| eur/usd | 1.0546 | 1.05279 |
| gbp/jpy | 181.903 | 181.391 |
| eur/cnh | 7.72868 | 7.7105 |
| usd/cnh | 7.32981 | 7.32 |
Equities and Commodities
| Nasdaq 100 | 14908.6 |
| DOW | 33608.7 |
| S&P 500 | 4310.84 |
| BRENT CRUDE | 91.02 |
| WTI | 88.25 |
| GOLD | 1950.82 |
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.
