Daily Market Update 11/05/2023

Key Points:

•            US inflation continues to ease

•            Bank of England with one final hike

•            GBP to take cues from Bailey’s statement


Inflation in the US dropped below 5% for the first time in two years, with the April reading coming in at 4.9% and core inflation easing to 5.5% from 5.6%. The now data dependent Federal Reserve seems to have room to pause in hiking rates in June, with markets still looking for the Fed to cut interest rates later this year. The USD index continues to trade near 2023 lows, thus causing GBPUSD and EURUSD to trade just shy of their recent highs.


All eyes on the Bank of England today. In a similar vein to the Fed and ECB meetings last week we are likely to see interest rates rise to 4.5%, but focus will of course be on the accompanying guidance on future policy. With market pricing suggesting peak interest rates of 4.85% for this year, we will need to see additional hawkish guidance from the Bank for GBP to continue its recent moves higher. Otherwise, should we see a dovish hike and markets ease rate expectations for this year, then we will likely see GBP come under selling pressure. Later in the afternoon we have producer inflation numbers out from the US, as well as the weekly initial jobless claims. Yesterday’s slightly lower than expected consumer inflation numbers barely dented USD, and there could well be minimal moves on USD pairs today from these data points today.

Equals Market Analysis– 11th May 2023

Today’s Market Rates

Today’s Interbank Rates at 09:58 am against GBP movement.

GBP>EUR – 1.1511

GBP>USD – 1.2581

EUR>USD – 1.0929

GBP>CAD – 1.6869

GBP>AUD – 1.8680

GBP>SEK – 12.941

GBP>AED – 4.6187

GBP>HKD – 9.8600

GBP>ZAR – 23.780

GBP>CHF – 1.1258

Today’s Speeches

•    EUR – ECB Schnabel, De Cos, Guindos

•    GBP – BoE Bailey


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