Marketwatch EU & UK

Daily Insights
August 16, 2024

  • The final piece of UK data for the week was released this morning and provides some optimism that the worst of the cost-of-living crisis may be behind us. Warmer weather helped to boost UK Retail Sales, with the volume of goods sold in shops and online rising 0.5% in July, further aided by discounts in departments stores on item such as sporting goods. At the same time, the previous month’s fall of 1.2% was revised higher to a fall of 0.9% suggesting a more solid start to the third quarter. The picture for the UK and particularly consumers looks a little brighter with inflation close to the BoE target, companies hiring at the strongest pace since November and lower interest rates, with more cuts in the pipeline. The pound is consolidating below 1.29 after a busy week of data releases from both sides of the pond.
  • This week’s data from the US has given investors some comfort that the world’s largest economy is likely to avoid a recession, after the market reacted poorly to a below consensus employment market report for July. Markets now seem more assured of a “goldilocks” scenario where the outlook appears not too hot or too cold, with inflation contained without stalling growth. This renewed more positive outlook was boosted by improved Retail Sales and a lower-than-expected weekly jobless report.
  • EURUSD continues to consolidate below 1.10 after breaching the key psychological level earlier this week. The pair has so far failed to hold on to its gains peaking at 1.1040 before drifting lower. The attention will start to shift to the Fed’s annual Jackson Hole Symposium which starts next week and Fed Chair Jerome Powell’s keynote speech on Friday. Markets will likely hang on his every word, looking for clues on the timing and size of the Fed’s first interest rate cut of the cycle.

Economic Calendar

:
NZD - RBNZ Gov Orr Speaks
:
JPY - Tertiary Industry Activity m/m
:
GBP - Retail Sales m/m
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CNY - Foreign Direct Investment ytd/y
:
EUR - Trade Balance
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CAD - Housing Starts
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CAD - Foreign Securities Purchases
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CAD - Manufacturing Sales m/m
:
USD - Building Permits
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USD - Housing Starts
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GBP - CB Leading Index m/m
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USD - Prelim UoM Consumer Sentiment
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USD - Prelim UoM Inflation Expectations
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USD - FOMC Member Goolsbee Speaks

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.8535 0.85287
gbp/usd 1.2875 1.28571
gbp/aud 1.94529 1.942
gbp/nzd 2.15015 2.14011
usd/jpy 149.273 148.739
eur/usd 1.09829 1.09716
gbp/jpy 191.925 191.477
eur/cnh 7.88395 7.8728
usd/cnh 7.1838 7.17127
Equities and Commodities
Nasdaq 100 19550.8
DOW 40623.6
S&P 500 5555.79
BRENT CRUDE 80.73
WTI 77.77
GOLD 2453.15

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.