Marketwatch EU & UK

Daily Insights
October 18, 2023

  • flag united states 1f1fa 1f1f8A higher-than-expected US Retail Sales print released yesterday boosted the US dollar, pushed treasury yields higher and increased the odds of a rate hike from the Federal Reserve. The print came in at 0.7%, more than twice the 0.3% that markets were expecting, pushing the 2-year yield to the highest level since 2006 as markets suspect that consumers are still able to absorb the higher interest rates forced upon them from the central bank. EURUSD initially fell on the news to test support at 1.0540, before rallying and running in to offers below 1.06 where the pair is currently consolidating.

 

  • flag united kingdom 1f1ec 1f1e7Eagerly anticipated data released this morning showed that UK inflation remains slightly hot, contradicting marginally softer than expected earnings data released yesterday. CPI for September came in at 6.7% from a year earlier, the same as the previous month, but a touch above economists’ predictions of 6.6%. Core inflation, which excludes volatile food and energy prices, fell less than expected to 6.1% from 6.2%. Sticky inflation has given rate setters on the Bank of England’s MPC a headache in recent months, and today’s release will add to concerns that the central bank hasn’t yet done enough to bring inflation down to the 2% target. Officials voted to keep rates on hold at the last MPC meeting, electing to wait and see how to economy evolves. The pound gained after the release, with the initial knee jerk reaction pushing GBPUSD through 1.22, although the pair has so far failed to breach key resistance at 1.2230. Markets will next look towards the upcoming Retail Sales data and second batch of labour market report for clues on the outlook for both the economy and monetary policy.

Economic Calendar

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CNY - Industrial Production y/y
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CNY - GDP q/y
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CNY - Retail Sales y/y
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CNY - Fixed Asset Investment ytd/y
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CNY - NBS Press Conference
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CNY - Unemployment Rate
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GBP - CPI y/y
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GBP - Core CPI y/y
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GBP - PPI Input m/m
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GBP - PPI Output m/m
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GBP - RPI y/y
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CNY - Foreign Direct Investment ytd/y
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EUR - Italian Trade Balance
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GBP - HPI y/y
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EUR - Final Core CPI y/y
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EUR - Final CPI y/y
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EUR - German 10-y Bond Auction
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CAD - Housing Starts
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USD - Building Permits
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USD - Housing Starts
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AUD - CB Leading Index m/m
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USD - Crude Oil Inventories
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USD - FOMC Member Waller Speaks
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USD - FOMC Member Williams Speaks
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USD - FOMC Member Bowman Speaks
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USD - Beige Book
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USD - Federal Budget Balance
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USD - FOMC Member Harker Speaks
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USD - TIC Long-Term Purchases
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USD - FOMC Member Cook Speaks
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JPY - Trade Balance

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.86883 0.86723
gbp/usd 1.22079 1.21586
gbp/aud 1.91448 1.90732
gbp/nzd 2.06805 2.05896
usd/jpy 149.79 149.481
eur/usd 1.05871 1.05604
gbp/jpy 182.697 182.062
eur/cnh 7.7442 7.7228
usd/cnh 7.3274 7.30345
Equities and Commodities
Nasdaq 100 15102
DOW 33985.1
S&P 500 4370.53
BRENT CRUDE 91.61
WTI 88.53
GOLD 1938.02

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

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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.