Marketwatch EU & UK

Daily Insights
August 1, 2024

  • Federal Reserve officials voted to keep the benchmark interest rate unchanged at their policy meeting yesterday, with Chairman Jerome Powell suggesting that a cut could come as soon as the next meeting. Rate setters have kept the key rate unchanged since last July and markets have been trying to second guess the Fed since the start of the year when interest rate cuts appeared more likely. Sticky inflation has delayed central bank action and Chairman Powell continued his recent rhetoric regarding upcoming data. He said, “The question will be whether the totality of the data, the evolving outlook, and the balance of risks are consistent with rising confidence on inflation and maintaining a solid labor market.” He added, “If that test is met, a reduction in our policy rate could be on the table as soon as the next meeting in September.”
  • The US dollar lost ground against its G10 peers with EURUSD inching higher but still within its recent range. The Japanese yen rallied further after the earlier interest rate hike from the BoJ with USDJPY trading below 150 as 2-year yields climbed for a second day.
  • The pound is steady ahead of the Bank of England meeting later today with the announcement on policy coming out at midday. The decision remains on a knife edge with the odds of a cut currently sitting at 50%. Inflation data since the previous meeting show that price pressures remain sticky, however the central bank has shown some willingness to tolerate upside inflation surprises. The policy vote from MPC members is more uncertain that usual, with many analysts suggesting a 6-3 vote in favour of a cut – however a cautious hold should not be discounted.

Economic Calendar

:
JPY - Final Manufacturing PMI
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AUD - Goods Trade Balance
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AUD - Import Prices q/q
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CNY - Caixin Manufacturing PMI
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CHF - Bank Holiday
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GBP - Nationwide HPI m/m
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AUD - Commodity Prices y/y
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EUR - Spanish Manufacturing PMI
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EUR - Italian Manufacturing PMI
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EUR - French Final Manufacturing PMI
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EUR - German Final Manufacturing PMI
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EUR - ECB Economic Bulletin
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EUR - Final Manufacturing PMI
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EUR - Italian Monthly Unemployment Rate
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GBP - Final Manufacturing PMI
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EUR - Unemployment Rate
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EUR - Spanish 10-y Bond Auction
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All - OPEC-JMMC Meetings
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EUR - French 10-y Bond Auction
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GBP - BOE Monetary Policy Report
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GBP - Monetary Policy Summary
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GBP - MPC Official Bank Rate Votes
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GBP - Official Bank Rate
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GBP - BOE Inflation Letter
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GBP - BOE Gov Bailey Speaks
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USD - Challenger Job Cuts y/y
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USD - Unemployment Claims
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USD - Prelim Nonfarm Productivity q/q
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USD - Prelim Unit Labor Costs q/q
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CAD - Manufacturing PMI
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USD - Final Manufacturing PMI
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USD - ISM Manufacturing PMI
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USD - ISM Manufacturing Prices
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USD - Construction Spending m/m
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USD - Wards Total Vehicle Sales
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USD - Natural Gas Storage
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GBP - MPC Member Pill Speaks
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JPY - Monetary Base y/y

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.84283 0.84211
gbp/usd 1.28606 1.28477
gbp/aud 1.96983 1.96248
gbp/nzd 2.16128 2.15637
usd/jpy 149.898 148.506
eur/usd 1.08353 1.08232
gbp/jpy 192.651 190.956
eur/cnh 7.83771 7.807
usd/cnh 7.23864 7.20875
Equities and Commodities
Nasdaq 100 19546.7
DOW 40990.5
S&P 500 5561.96
BRENT CRUDE 81.52
WTI 78.68
GOLD 2445.84

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.