UK: Weekly FX Market Update 26 October
GBP
The FT reports that Chancellor Healey will deliver a ‘Do no harm’ budget. Could that be the case?
With annual CPI at 3.5%, will the Bank of England hike rates on fireworks night?
Could this combination of rate hikes and a ‘steady as she goes’ budget keep sterling supported?
EUR
The spread between French OATS and German Bunds is circa 175 basis points and approaching the 2011 high at 190 basis points.
Will investor jitters over the Euro continue, with the French parliament voting on the budget on Nov 17th and the European Central Bank (ECB) setting rates this Thursday?
A Bloomberg survey shows economists expect only one more rate hike from the ECB and then the rate hike cycle is finished. If this is the case, with the market currently expecting two more rate hikes to come, will this produce more Euro weakness?
USD
With the AI trade stalling and the oil price rising, the market looks for safe havens.
US Treasuries are bought by investors, supporting the US$.
The Federal Reserve sets rates on Wednesday & is not expected to hike rates six days before the US mid-term elections. Despite stronger-than-expected US inflation. Could we get a ‘hawkish hold’ from the Fed, supporting the US Dollar?
Mon Oct 26
09:00 EUR German IFO Business Climate
Tue Oct 27
12:30 USD Durable Goods
14:00 USD Consumer Confidence
Wed Oct 28
00:30 AUD CPI
12:30 GBP UK Budget
13:45 CAD Bank of Canada (BoC) Interest Rate Decision
14:30 BoC Press Conference
18:00 USD Federal Funds Rate/Statement
18:30 USD FOMC Press Conference
Thu Oct 29
12:30 USD Advance GDP/Core PCE/Unemployment Claims
13:15 EUR European Central Bank (ECB) Interest Rate Decision/Statement
13:45 EUR ECB Press Conference
Fri Oct 30
05:00 JPY Bank of Japan (BoJ) Interest Rate Decision/Statement
05:30 JPY BoJ Press Conference
07:00 EUR German Prelim CPI
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