Marketwatch EU & UK

Daily Insights
December 12, 2023

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  • It has been a subdued start to the week, with the Fed still in blackout ahead of their latest policy meeting and markets seemingly in December trading mode. However, things are likely to liven up in the coming days, as we await key data and central bank meetings. This afternoon’s US CPI print will be closely monitored as investors look for clues on the Fed’s policy into 2024. It is likely that headline CPI will be flat for a second consecutive month, possibly giving the central bank room to consider rate cuts as inflation risks become more balanced. Year on year headline CPI is expected to fall slightly to 3.1% from 3.2%, with falls aided by lower gasoline and used car prices. Today’s print is unlikely to influence this week’s policy decision from the FOMC but may impact the timing as to just when rate setters will be expected to start to cut interest rates in 2024.

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  • Data released this morning showed that UK wage growth slowed in the three months through August, in a further sign that the labor market is cooling in response to a struggling economy. Average earnings excluding bonuses rose 7.3% from a year ago, down from an upwardly revised 7.8%. The print suggests that members of the MPC have done enough to rein in inflationary pressures coming from the labour market after the recent aggressive rate hiking cycle. Another hold from the BoE is on the cards this week, with markets continuing to expect the “higher for longer” rhetoric to remain. The pound dropped after the data release and remains below the psychological 1.26 area, supported at 1.2550.

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  • The single currency remains steady against the greenback, with EURUSD hovering in the 1.07-1.08 range ahead of the German ZEW survey due to be released this morning. Markets will be looking to see if the German economy has passed its lowest point with tighter financial conditions continuing to drag on the euro areas largest economy.

Economic Calendar

AUD - NAB Business Confidence
EUR - German WPI m/m
GBP - Claimant Count Change
GBP - Average Earnings Index 3m/y
GBP - Unemployment Rate
CNY - New Loans
CNY - M2 Money Supply y/y
EUR - ZEW Economic Sentiment
EUR - German ZEW Economic Sentiment
USD - NFIB Small Business Index
GBP - NIESR GDP Estimate
USD - Core CPI m/m
USD - CPI m/m
USD - CPI y/y
USD - 30-y Bond Auction
USD - Federal Budget Balance
NZD - Current Account
NZD - FPI m/m
JPY - Tankan Manufacturing Index
JPY - Tankan Non-Manufacturing Index

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.85814 0.85575
gbp/usd 1.25842 1.25527
gbp/aud 1.91369 1.90479
gbp/nzd 2.05122 2.03937
usd/jpy 146.121 145.218
eur/usd 1.07832 1.07611
gbp/jpy 183.444 182.557
eur/cnh 7.74949 7.7309
usd/cnh 7.1941 7.17978
Equities and Commodities
Nasdaq 100 16256.4
DOW 36417.9
S&P 500 4626.21
WTI 71.94
GOLD 1986.92

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.