· GBP finished higher across the board following the better-than-expected GDP figures for October.
· Notable gains were versus AUD – near February highs, JPY – near November’s highs and versus ZAR – near the 2022 highs.
· Trading on USD was lacklustre ahead of today’s inflation figures.
All eyes are on this afternoon’s US inflation print and what this will mean for end-of-year flows as well as generating themes for next year.
Optimism has been in the markets of late that perhaps a peak in inflation had passed. But data two weeks ago suggested that the jobs market remains tight with wages still rising and then Friday’s producer price inflation figures came in higher as well. So, is there a surprise on the cards today for US inflation data to come in higher? Markets are expecting softer inflation data, so we wait to see what 1.30pm brings us.
Should inflation data come in as expected or softer then expect risk-correlated assets, such as GBP, to rise and the USD to weaken further. Should inflation come in higher than we would expect to see the USD start to claw back the losses it has suffered over the last 4 weeks.
UK jobs data this morning showed that the unemployment rate increased to 3.7% from 3.6%, regular wages came in higher than expected at 6.1% up from 5.7% and the number of employees on payroll came in at its highest since August 2021 at 107,000 suggesting that our own job market is still tight. Relatively no impact on GBP though. Next up for the UK will be tomorrow’s inflation figures followed by the Bank of England’s rate decision on Thursday.
Equals Market Analysis– 13th December 2022
Today’s Market Rates
Today’s Interbank Rates at 09:16 am against sterling movement.
GBP>EUR – 1.1638
GBP>USD – 1.2268
EUR>USD – 1.0538
GBP>CAD – 1.6699
GBP>AUD – 1.8131
GBP>SEK – 12.672
GBP>AED – 4.5047
GBP>HKD – 9.5370
GBP>ZAR – 21.695
GBP>CHF – 1.1494
· GBP BoE’s Governor Bailey speech
· USD Consumer Price Index ex Food & Energy (YoY)(Nov)
· USD Consumer Price Index ex Food & Energy (MoM)(Nov)
· AUD RBA’s Governor Lowe speech
· JPY Tankan Large Manufacturing Index(Q4)
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