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Home > Market Watch > EU & UK News > Thu December 14, 2023

Daily Insights
December 14, 2023

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  • As expected, the Federal Reserve kept interest rates unchanged as officials concluded the final policy meeting of the year. Rate setters gave an early Christmas presents to markets in the form of a dovish outlook with a dot plot which showed 75 basis points of cuts in 2024 -a sharper pace of cuts than last indicated in September. The US dollar fell, and treasuries rallied pushing the 10-year yield below 4% for the first time since August, with futures markets now pricing in 140 basis points of easing in the next 12 months. Data released ahead of the Fed announcement showed slowing PPI gains as energy pricing falls, which followed CPI data which showed a decrease in the annual rate of inflation – further signs that prices are finally trending back towards the Fed’s target.

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  • The Japanese yen was one of the biggest gainers against the under-pressure greenback yesterday with USDJPY falling just below 141 before consolidating. The dollar lost ground against most of its G10 peers, with EURUSD posting gains above 1.09 and cable back on a 1.26 handle.

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  • Both the ECB and BoE hold policy meetings today and both are expected to keep rates on hold. Following yesterday’s Fed pivot towards lower rates, markets have ramped up bets on additional cuts next year from the ECB and BoE. Markets now price in 157 basis points of ECB easing, suggesting at least six 0.25% cuts in 2024. For the UK, markets now have fully priced five cuts of the same magnitude – up from three a few weeks ago.

Economic Calendar

14 Dec 2023
:
AUD - MI Inflation Expectations
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GBP - RICS House Price Balance
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AUD - Employment Change
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AUD - Unemployment Rate
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JPY - Revised Industrial Production m/m
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CNY - Foreign Direct Investment ytd/y
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CHF - PPI m/m
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CHF - SNB Monetary Policy Assessment
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CHF - SNB Policy Rate
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CHF - SNB Press Conference
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GBP - Monetary Policy Summary
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GBP - MPC Official Bank Rate Votes
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GBP - Official Bank Rate
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GBP - BOE Inflation Letter
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GBP - BOE Gov Bailey Speaks
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EUR - Main Refinancing Rate
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EUR - Monetary Policy Statement
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CAD - Manufacturing Sales m/m
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USD - Core Retail Sales m/m
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USD - Retail Sales m/m
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USD - Unemployment Claims
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USD - Import Prices m/m
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EUR - ECB Press Conference
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USD - Business Inventories m/m
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USD - Natural Gas Storage
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NZD - BusinessNZ Manufacturing Index
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AUD - Flash Manufacturing PMI
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AUD - Flash Services PMI

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.86281 0.86168
gbp/usd 1.26525 1.26193
gbp/aud 1.89425 1.87939
gbp/nzd 2.03896 2.02427
usd/jpy 142.908 140.944
eur/usd 1.09153 1.08791
gbp/jpy 180.414 178.327
eur/cnh 7.79033 7.7592
usd/cnh 7.14713 7.1244
Equities and Commodities
Nasdaq 100 16656.7
DOW 37158.1
S&P 500 4722.96
BRENT CRUDE 74.69
WTI 69.84
GOLD 2031.74

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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