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Market Update

• Posted by currencies in Bank of England, Dollar, Economy, election, EUR, Fed, GBP, Inflation, Rate Cuts, Sterling, UK, Uncategorised
• September 9, 2024
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There has been a significant risk off tone in the markets over the last two weeks- where we have seen stocks sell off, and consequently, Pound Sterling as well. GBPUSD usually gets hit the most in a risk off environment, alongside EURUSD, both down around 1.5% over the past week. GBPEUR is now also in the low 1.18’s- generally the sentiment is Sterling is on the path to more strength but general market moods will determine just how much- also upcoming Central Bank meetings will also be the catalyst for the next wave of strength/weakness.

Onto this week’s data- Monday is a pretty empty day so we will move straight onto Tuesday, we begin the day with UK unemployment data and jobless claims- this is a pretty important number that the BoE will be watching, a low number means that they may have to cut rates further.

On Wednesday we have UK manufacturing output data and trade balance data- this will be followed by U.S CPI data which will probably be the main event for the day- markets will be looking for a lower number to back the case for the Fed cut this month- although a higher number probably wont affect the outcome- either way the result will affect the market that afternoon.

On Thursday we have US Producer price data which should track CPI from the day before, and on Friday we have we have EU industrial production which currently is negative so this release could also weaken the Euro further.