Marketwatch EU & UK

Daily Insights
August 12, 2024

  • In a speech on Sunday, Federal Reserve Governor Michelle Bowman said that she still sees upside risks for inflation and continued strength in the labor market. She said, “The progress in lowering inflation during May and June is a welcome development, but inflation is still uncomfortably above the committee’s 2% goal.” She signalled that she may not be ready to support an interest rate cut in the September policy meeting adding, “I will remain cautious in my approach to considering adjustments to the current stance of policy.”
  • Inflation and the outlook for the US economy remain high on the agenda this week as markets eagerly await US PPI and CPI on Tuesday and Wednesday respectively. July Producer Prices are expected to have risen at a similar 0.2% pace as June, however elements of this data that feed into the Fed’s preferred inflation measure, the core PCE deflator will be closely monitored. July’s CPI print is expected to edge lower, with the headline rate expected to dip to 2.9% from 3.0% and to core to reduce to 3.2% from the previous 3.3%.
  • It’s a busy week for UK data with analysts looking to see if the BoE can cut rates further over the remainder of the year. The upcoming UK employment data is expected to show pay pressures cooling and a further rise in unemployment. Wednesday’s CPI inflation report is expected to have accelerated, with the BoE pencilling in a reading of 2.4% in its August forecast. Any increase will be driven by a base effect associated with household energy bills. UK GDP is released on Thursday and the week wraps up with Retail Sales on Friday, which should bounce back in July after the unseasonably cool weather in June which hit sales on the High Street.

Economic Calendar

:
AUD - RBA Deputy Gov Hauser Speaks
:
EUR - German WPI m/m
:
CNY - New Loans
:
CNY - M2 Money Supply y/y
:
CAD - Building Permits m/m
:
USD - Cleveland Fed Inflation Expectations
:
USD - Federal Budget Balance
:
NZD - Visitor Arrivals m/m
:
JPY - PPI y/y

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.85626 0.85289
gbp/usd 1.27652 1.27436
gbp/aud 1.94194 1.93643
gbp/nzd 2.12858 2.11902
usd/jpy 147.222 146.419
eur/usd 1.09229 1.08948
gbp/jpy 187.854 186.553
eur/cnh 7.84489 7.81836
usd/cnh 7.185 7.16541
Equities and Commodities
Nasdaq 100 18561.3
DOW 39515.7
S&P 500 5351.99
BRENT CRUDE 79.85
WTI 77.21
GOLD 2432.61

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.