Monthly Archives: August 2024

Already released this morning, Pound Sterling has climbed against the other currencies in the G10 following Gross Domestic Product figures released by the Office for National Statistics. 

GDP increased 0.6 percent over the second quarter mitigating the risk of a recession – this is the second consecutive quarter of economic growth.

Manufacturing and industrial output both released above the market consensus and has highlighted a chain of positive economic reports from the UK, following the softer-than-expected CPI inflation print and fall in the unemployment rate earlier this week. Tomorrow investors will keep a close eye on retail sales data for July.

In the States, unemployment claims is expected to gradually rise to 235k. Later on today we have US retail sales, industrial production and import prices.

GBPUSD has been on an upward trajectory over the last few weeks, GBPUSD is currently trading at a 17-day high.

US inflation slowed to 2.9 percent in July, traders have reduced their bets of a Fed interest rate cut. Markets are pricing in a 55/45 chance that the Federal Reserve will reduce interest rates by 25-basis points.

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.

Inflation has risen for the first time this year, according to official figures, dealing a blow to Sir Keir Starmer after just one month in office.

The consumer price index (CPI) increased by 2.2 percent in July, up from 2 percent in both May and June, according to the Office for National Statistics. This was less than the 2.3 percent increase projected by analysts.

It is the first time CPI has risen since December 2023, when the Bank of England boosted interest rates to 16-year highs to reduce inflation, which peaked at 11.1 percent in October 2022 following a dramatic surge in oil prices caused by Russia’s invasion of Ukraine.

Yesterday, the key currency pairs remained within narrow ranges. Sterling began the day with some upward momentum following UK labour market reports (which revealed higher-than-expected job growth and a slowing of pay growth).

The main attention today will be on the US July CPI inflation statistics, which will be released this afternoon. The top line rate is predicted to remain at 3.0%, but the core rate is forecast to fall to 3.2% (from 3.3%). The numbers indicate some event risk for the dollar. Previously, the June CPI data was lower than expected, putting negative pressure on the currency.

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.

Early this morning, the UK published its latest employment figures, revealing an unexpected drop in the unemployment rate to 4.2%. This decline is significant because a low unemployment rate typically indicates a strong economy and can often result in upward pressure on wages as businesses compete for a smaller pool of workers.

Following the release of this positive employment data, the pound reacted strongly, gaining 30-40 points against both the euro and the dollar. This boost reflects market confidence in the UK’s economic outlook.

Later today, attention will shift to the States, where the Producer Price Index (PPI) is set to be released. Markets are anticipating a slight decline in the PPI to 0.2% compared to the previous month, which will be closely watched as an indicator of inflationary pressures in the US.

The remainder of the week is set to be particularly eventful for the UK, with a focus on economic data releases. On Wednesday, the next major release will be the Consumer Price Index (CPI) report, which will provide the first inflation figures since the Bank of England’s recent decision to cut interest rates. This CPI report will be crucial in assessing the impact of the rate cut on inflation and the broader economy.

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.

Following a highly volatile start to the week on financial markets last Monday, trade conditions improved slightly.

Trading conditions improved last week as a result of dovish remarks from Bank of Japan Deputy Governor Uchida and a relatively calm economic calendar on both sides of the Atlantic.

Furthermore, the main release of note, the US non-manufacturing ISM for July, printed ahead of the consensus, rising to 51.4 (vs. 51.0 f’cast). Elsewhere, there was a modest hardening in US market rate expectations last week.

In the coming week, data schedules in the UK and US will be extremely busy. The UK data calendar covers updates on the job market, inflation, and economic development. Meanwhile, in the United States, CPI inflation statistics for July will be closely watched. US retail sales and industrial output figures are also due.

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.

There is no UK or EU data in the calendar today, so attention will turn to US releases.

US unemployment claims is set to slightly fall from Friday’s highest release this year to 240k. The number of people continuing unemployment claims is expected to remain inflated at 1.87 million. 

Global markets have seemed to stabilise mid-week, following the volatile movement last Friday that pointed the US economy towards a recession.

This week has been quiet in terms of key economic data releases. Investors will now be looking forward to next week, when we have the highly anticipated UK CPI inflation reading.

UK inflation held at the Bank of England’s target level of 2 percent in May and June. However, there are other concerns about underlying inflation, such as services inflation which remains high.

Employment figures (earnings & unemployment rate), Gross Domestic Product and Industrial production will be closely watched next week to see how the UK economy is fairing.

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.