Marketwatch EU & UK

Daily Insights
December 20, 2024

  • As widely expected, the Bank of England kept interest rates unchanged at the final policy meeting of the year. Three members of the nine member MPC committee voted to cut rates by 25bp with the majority opting to keep the benchmark rate unchanged at 4.75%. Signs of stubborn inflation and stronger than expected wage growth have prompted money markets to factor in fewer rate cuts next year with BoE Governor Andrew Bailey expressing caution. In a statement he said, “we think a gradual approach to interest rates remains high” adding “but with heightened uncertainty in the economy we can’t commit to when or how much we will cut rates in the coming year.” Markets are undecided on a cut at the February meeting with analysts once again monitoring data as it Is released for signs of when the BoE may be able to reduce rates to boost growth. ‘Caution’ appears to be the central bank buzzword as we move into 2025 with both the BoE and Fed set to lower rates gradually throughout the year.
  • Data released this morning showed that UK Retail Sales grew more slowly than expected in November as ongoing cost of living pressures weighed on consumer sentiment in the wake of the recent budget. The volume of goods sold in stores and online rose just 0.2% last month, lower than the 0.5% that markets were expecting as clothing store sales dipped sharply with retailers reporting tough trading conditions.
  • The US dollar remains well supported with the dollar index rising for a fourth day after the Fed cut rates earlier this week. GBPUSD is currently trading around 1.25 and EURUSD remains below 1.04 as markets await the release of eurozone consumer confidence data later this morning. This afternoon the attention shifts back to the US as we look forward to the release of the PCE report. This is the Fed’s preferred inflation gauge and markets are expecting a small reduction in the print for November.
  • This is the final Market Watch of 2024, and we would like to wish all our readers a Merry Christmas and a Happy New Year.

Economic Calendar

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AUD - Private Sector Credit m/m
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CNY - 1-y Loan Prime Rate
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CNY - 5-y Loan Prime Rate
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NZD - Credit Card Spending y/y
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EUR - German PPI m/m
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GBP - Retail Sales m/m
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GBP - Public Sector Net Borrowing
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GBP - CBI Realized Sales
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USD - FOMC Member Daly Speaks
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GBP - BOE Quarterly Bulletin
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CAD - Core Retail Sales m/m
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CAD - Retail Sales m/m
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USD - Core PCE Price Index m/m
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USD - Personal Income m/m
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USD - Personal Spending m/m
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EUR - Belgian NBB Business Climate
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EUR - Consumer Confidence
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USD - Revised UoM Consumer Sentiment
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USD - Revised UoM Inflation Expectations
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AUD - CB Leading Index m/m

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.83101 0.82878
gbp/usd 1.25112 1.24749
gbp/aud 2.00821 2.00035
gbp/nzd 2.22457 2.21473
usd/jpy 157.925 156.762
eur/usd 1.03852 1.03427
gbp/jpy 197.296 195.774
eur/cnh 7.58926 7.5572
usd/cnh 7.3138 7.30055
Equities and Commodities
Nasdaq 100 21019.9
DOW 42289.3
S&P 500 5857.16
BRENT CRUDE 72.58
WTI 69.04
GOLD 2602.17

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.