UK: Weekly FX Market Update 12 October

GBP

• BoE Gov Bailey warns that interest rates may have to be hiked soon, as Bloomberg analysts give an 89% chance of them rising on November 5th.

• The budget is on October 28th, with media reports describing an event lacking tax hikes & including reduced fiscal headroom of £14 billion.

• How will sterling react to US CPI on Wednesday and UK GDP on Thursday? Is a test of 1.3000 coming soon?

EUR

• Investors show their concern over French budget issues and a snap Spanish election by keeping the Euro under pressure.

• ECB Economist Lane says that the ECB can take a ‘measured’ response to the effects of the Iran war. With markets giving an 86% chance of another 0.25% rate hike from the ECB by December.

• What will Lagarde say on Wednesday and how will Eurozone Final CPI move the Euro on Friday?

USD

• PIMCO warns that US 10-year Treasury yields risk hitting 6% for the first time since 2000.

• Is it inflation or term premium that is forcing US rates higher?

• As Trump works with Putin to get the diesel price lower before the Nov 3rd mid-term elections, will CPI on Wednesday show softness just like the latest PCE release did?

Mon Oct 12

All Day Japan, Spain, US & Canada Holiday

All day IMF Meetings

13:50 GBP MPC Mann Speaks

Tue Oct 13

08:45 USD FOMC Waller Speaks

Wed Oct 14

06:30 GBP BoE Gov Bailey Speaks

09:30 EUR ECB Pres Lagarde Speaks

13:30 USD CPI

Thu Oct 15

01:30 AUD Employment Report

07:00 GBP GDP/Industrial Production/Manufacturing Production

13:30 USD PPI/Retail Sales

Fri Oct 17

03:00 GBP BoE Gov Bailey Speaks

04:30 USD Fed Chair Warsh Speaks

10:00 EUR Final CPI