Marketwatch EU & UK

Daily Insights
July 25, 2023

The euro and sterling are trading in a tight range this morning ahead of PMI data for Eurozone, Germany, and UK. Ahead of this busy week in Europe and the US, EUR/USD is trading firmly above 1.11 and GBP/USD, although ticking higher, remains below 1.29. USD/JPY falls and trades mid 141-142. The Bloomberg Dollar Spot index is poised to lose for the first time in four days. Oil fell after winning for four weeks as traders prepare themselves for another hike from the Fed this week.

The FOMC is widely estimated to hike by another 25 basis points at the July 25-26 meeting, but markets are looking for clues on whether this is the last hike of the tightening cycle. Many Fed officials stated in previous weeks the need to do more until there are clearer signs of a slowdown in the economy, but many economists argue they will keep interest rates constant for the rest of the year. All the credit tightening in place and what is priced in is the base of these arguments and it shall give markets encouraging core inflation data and evidence of a slowdown on wage growth.

There’s a lot of data that started pointing out the possibility of the US economy dodging a recession and reaccelerating the following year. Consumer confidence (Tue.), second quarter GDP growth (Thurs.), and housing market data such as new home sales (Wed.) and pending home sales (Thurs.) will be the key data events that we will keep an eye on this week.

In Europe, the ECB takes the main stage where it is expected to lift all three key rates by 25 basis points on July 27 and the focus will be on any signals on the ECB path beyond July.  Please note there is another 25-basis point hike priced for the September meeting.

Euro-area and UK Flash PMI surveys for July will be key data in Europe this week, which will provide us with the first look at how economies are developing in the third quarter with extremely strict monetary conditions. There will also be Germany IFO Expectations (Tue.) , and French and Spanish GDP Data ( Fri.) to keep an eye on.

Have a good week.

Economic Calendar

EUR - French Flash Manufacturing PMI
EUR - French Flash Services PMI
EUR - German Flash Manufacturing PMI
EUR - German Flash Services PMI
GBP - Flash Services PMI
GBP - Flash Manufacturing PMI
USD - Flash Manufacturing PMI
USD - Flash Services PMI

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.86494 0.86446
gbp/usd 1.28532 1.28453
eur/aud 1.65047 1.64935
gbp/nzd 2.07857 2.07612
usd/jpy 141.686 141.5
eur/usd 1.11254 1.11178
gbp/jpy 182.041 181.761
eur/cnh 2 2
Equities and Commodities
FTSE 7,700.2900
UK100 7672.45
DOW 35,411.2400
SP500 4,554.6400
WTI 78.96
GOLD 1961.88
Nasdaq 100
S&P 500

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 Francisco Mioludo


Francisco Mioludo is a trader for GPS Capital Markets at the London office. Before joining GPS, Francisco worked in Market Risk at a commodity trading firm in London where he gained valuable skills for his current role. Francisco looks after our EU and UK sales team with everything from analysis to structuring and pricing.