Previous Day's Market Highlights
Sterling rallied yesterday after inflation accelerated more than expected to 2.9% in August, matching highs last seen in May. Retail and Producer Price Indices surprised to the upside as well. The gains reignited speculation that the Bank of England might strike a more hawkish tone. The MPC makes its latest policy announcements on Thursday.
Sterling-euro rallied above 1.1100, its highest levels since 3 August. Sterling-dollar regained 1.3200, which it had hit last Friday, before rallying past the previous year-to-date high around 1.3272 to break above 1.3300 in overnight trading for the first time since 13 September 2016.
The pound recovered most of the ground lost against the New Zealand dollar earlier in the morning after the kiwi rallied on the latest election polls. Having fallen around 1.2% against the kiwi, sterling later recovered and briefly broke 1.8300 overnight.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
|GBP / EUR||1.1114||1.1134||1.0745||3.49%|
|GBP / USD||1.3308||1.3315||1.2777||4.04%|
|EUR / USD||1.1974||1.2093||1.1662||3.56%|
|GBP / NZD||1.8246||1.8315||1.7522||4.33%|
|GBP / CAD||1.6192||1.6435||1.5837||3.64%|
Today's Market Highlights
The UK’s releases continue this morning with the latest employment data (09:30 BST). Any gains in wage growth will be closely watched for and may support the pound, while slower-than-expected wage growth may weigh on the pound, particularly given yesterday’s pick-up in inflation.
The BoE meeting tomorrow poses a downside risk as expectations of a more hawkish BoE may be disappointed if the Bank continues to look through above-target inflation, thus weakening the pound. The Bank is not expected to announce any policy changes this month.
The Eurozone releases Industrial Production and Employment Change data (10:00 BST). The releases tend to have limited market impact, but markets will keep an eye out for any surprises.
In the afternoon, the US releases the latest Producer Price Index figures (13:30 BST). Price data is in focus at the moment as the Fed looks for signals that inflation will rise to its 2% target rate. Canadian dollar traders will keep an eye on weekly EIA crude oilinventories (15:30 BST).
Today's Economic Calendar
|09:30||GBP||Claimant Count Change (Aug)||0.6K||-4.2K|
|09:30||GBP||ILO Unemployment Rate 3M (Jul)||4.4%||4.4%|
|09:30||GBP||Average Earnings Excluding Bonus 3M/Yr (Jul)||2.2%||2.1%|
|09:30||GBP||Average Earnings Including Bonus 3M/Yr (Jul)||2.3%||2.1%|
|10:00||EUR||Industrial Production w.d.a. YoY (Jul)||3.4%||2.6%|
|10:00||EUR||Industrial Production s.a. MoM (Jul)||0.1%||-0.6%|
|10:00||10:00||Employment Change QoQ (Q2)||0.3%||0.4%|
|10:00||EUR||Employment Change YoY (Q2)||1.4%||1.5%|
|13:30||USD||Producer Price Index YoY (Aug)||2.5%||1.9%|
|13:30||USD||Core Producer Price Index (Aug)||2.1%||1.8%|
|15:30||USD||EIA Crude Oil Inventories||2.285M||4.580M|