Marketwatch EU & UK

Daily Insights
October 19, 2023

  • 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.

Economic Calendar

AUD - Employment Change
AUD - Unemployment Rate
AUD - NAB Quarterly Business Confidence
CNY - New Home Prices m/m
AUD - RBA Annual Report
CHF - Trade Balance
CNY - Foreign Direct Investment ytd/y
EUR - Current Account
EUR - Spanish 10-y Bond Auction
CAD - IPPI m/m
CAD - RMPI m/m
USD - Unemployment Claims
USD - Philly Fed Manufacturing Index
USD - FOMC Member Jefferson Speaks
USD - Existing Home Sales
USD - CB Leading Index m/m
USD - Natural Gas Storage
USD - Fed Chair Powell Speaks
USD - FOMC Member Goolsbee Speaks
USD - FOMC Member Barr Speaks
USD - Federal Budget Balance
USD - FOMC Member Harker Speaks
NZD - Trade Balance
USD - FOMC Member Logan Speaks
GBP - GfK Consumer Confidence
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
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.