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Home > Market Watch > EU & UK News > Wed December 18, 2024

Daily Insights
December 18, 2024

  • Inflation in the UK remains stubbornly high and confirmed by the latest data which showed it rising to an eight-month high in November, with the release coming just a day ahead of the BoE policy meeting. CPI increased 2.6% annually, up from 2.3% in October and broadly inline with market expectations, but above the 2.4% BoE forecast. Services inflation remains above the central banks 4.9% target at 5% and suggests that the MPC will keep rates unchanged when they hold their final meeting of the year tomorrow. Fears over the outlook for the UK economy and rising inflationary risks confirm that rate setters will be forced to ease at a gradual pace next year. GBPUSD initially rallied on the news, spiking to 1.2720 before retreating to once again consolidate around 1.27.
  • The US dollar was mixed against its G10 peers as markets eagerly await the outcome from both the BoJ and Federal Reserve for further clues on policy moves. The odds of a 25bp cut later today from the Fed sit at around 90%, with mixed Retail Sales released yesterday doing little to shift the needle. Traders are likely to take any rate cut in their stride and are more likely to focus on future projections with analysts believing that policymakers will signal fewer rate cuts next year than previously projected. The dot-plot will be closely scrutinised with rate setters now expected to pencil in just three interest rate cuts in 2025 – down from the four expected in September.

 

Economic Calendar

18 Dec 2024
:
AUD - Mid-Year Economic and Fiscal Outlook
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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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EUR - German Buba President Nagel Speaks
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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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GBP - CBI Industrial Order Expectations
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USD - Building Permits
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USD - Current Account
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USD - Housing Starts
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CHF - SNB Quarterly Bulletin
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USD - Crude Oil Inventories
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USD - Federal Funds Rate
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USD - FOMC Economic Projections
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USD - FOMC Statement
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USD - FOMC Press Conference
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NZD - GDP q/q

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.82764 0.82543
gbp/usd 1.27242 1.26936
gbp/aud 2.01273 2.0049
gbp/nzd 2.21562 2.20697
usd/jpy 153.784 153.332
eur/usd 1.05127 1.04926
gbp/jpy 195.474 194.757
eur/cnh 7.66247 7.6437
usd/cnh 7.29338 7.28217
Equities and Commodities
Nasdaq 100 22040.4
DOW 43535.5
S&P 500 6062.31
BRENT CRUDE 73.25
WTI 70.13
GOLD 2645.45

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.

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