Marketwatch EU & UK

Daily Insights
November 27, 2024

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The DXY index is trading around 106.60 at the start of the day as the markets reacted to yesterday’s FOMC meeting minutes and now prepare for key US inflation data being released later this session.

The Fed’s November meeting minutes reflect confidence that inflation is easing and the labour market remains strong, supporting the prospect of gradual interest rate cuts.

With a unanimous decision for a 25 bps cut at the last meeting, bringing the target range to 4.5%-4.75%, the committee is looking to reach its 2% inflation goals while maintaining high employment.

Markets expect another Fed cut again in December, although conviction has waned among concerns that Trump tariffs could stoke higher inflation.

US data reports have been pushed forward to accommodate this week’s US Thanksgiving holiday. Key data today will include US PCE, GDP (3Q), Durable Goods Orders, and Initial Jobless Claims. Annualised core PCE inflation data is forecasted at 2.8%, from the previous 2.7%. 3rd quarter GDP growth is expected to remain the same at 2.8%. Durable Goods Orders are expected at 0.5% compared to -0.7% prior. Initial Jobless Claims is surveyed at 215K compared to 213K prior.

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EURUSD remains below 1.05 as the pair moves sideways in a narrow channel ahead of US macroeconomic data.

US PCE and GDP (Q3) data are today’s main data points that could move the pair, with Eurozone HICP data coming out later on Friday.

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GBPUSD trades below 1.26 during this morning’s session as the pair is supported by recent US dollar weakness and cautious trading ahead of US data releases later today.

After reaching a six-month low of 1.2487 late last week, the pair has recovered slightly to the 1.25 region, moving choppily as market makers await policymaker meetings in December.

There are a number of UK financial activity figures being released on Friday, but the data is mostly low-tier and will have limited impact. This leaves US data responsible for further cable movement this week.

 

World News

 

The Reserve Bank of New Zealand announced another 50bps cut, reducing the Official Cash Rate from 4.75% to 4.25%. As a widely expected move by the RBNZ, there are expectations for further cuts as they look to reach a neutral rate somewhere between 2.5% to 3.5%.

Economic Calendar

:
AUD - CPI y/y
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AUD - Construction Work Done q/q
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NZD - Official Cash Rate
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NZD - RBNZ Monetary Policy Statement
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NZD - RBNZ Rate Statement
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NZD - RBNZ Press Conference
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EUR - German GfK Consumer Climate
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CHF - UBS Economic Expectations
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USD - Prelim GDP q/q
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USD - Unemployment Claims
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USD - Core Durable Goods Orders m/m
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USD - Durable Goods Orders m/m
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USD - Prelim GDP Price Index q/q
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USD - Goods Trade Balance
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USD - Prelim Wholesale Inventories m/m
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USD - Chicago PMI
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USD - Core PCE Price Index m/m
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USD - Pending Home Sales m/m
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USD - Personal Income m/m
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USD - Personal Spending m/m
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USD - Crude Oil Inventories
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USD - Natural Gas Storage

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.83463 0.83327
gbp/usd 1.26061 1.25664
gbp/aud 1.94541 1.93885
gbp/nzd 2.15709 2.13621
usd/jpy 153.032 151.541
eur/usd 1.05145 1.04742
gbp/jpy 192.409 190.986
eur/cnh 7.62423 7.6065
usd/cnh 7.26976 7.24886
Equities and Commodities
Nasdaq 100 20903.6
DOW 44861.9
S&P 500 6021.15
BRENT CRUDE 73.17
WTI 68.95
GOLD 2648.33

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 Matthew Hunter

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Matthew Hunter is a trader for GPS Capital Markets at the London office. Before joining GPS, Matthew studied business strategy, focusing on international finance and political science. Matthew looks after our EU and UK sales team with everything from analysis to structuring and pricing.