Tag Archives: Financenews

Risk appetite was increased by overnight reports from China about the possibility of additional stimulus measures for the world’s second largest economy.

China’s central bank reduced interest rates and injected cash into the banking system today as Beijing launched a last-ditch stimulus campaign to return economic growth to this year’s objective of around 5%.

In the Eurozone, the ECB appears to be about to accelerate its rate-cutting program. Recent economic indicators, including as a gradually deteriorating PMI and expected negative growth in Germany, France, and Italy, suggest that the ECB’s bullish outlook on growth may be overstated.

ECB’s data dependent approach suggests that the central bank would stay flexible and change its policy stance in response to changing economic conditions.

It does not rule out a 50 basis point decrease in December 2024, or a faster rate of easing if economic data deteriorates severely.

Looking forward, today brings some significant survey data from the Eurozone, as the European Commission’s September economic confidence report is coming. The headline index is predicted to fall marginally, to 96.5 (from 96.6). However, considering the lower-than-expected PMI figures earlier in the week, there are negative risks to this estimate.

In the United States, the spotlight will be on the release of core-PCE (the Fed’s preferred inflation index) for August. Core inflation is expected to increase modestly to 2.7% from 2.6%.

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

With no UK economic data scheduled for today, market attention turns to key US policymakers’ speeches and the latest US statistics.

Already released this morning, German consumer confidence marginally improved, which was a surprise after previous economic data suggested Germany were heading towards a looming recession.

In the States, US Gross Domestic Product is set to increase to 2.9 percent (previous 1.4%), showing signs of economic growth. However, this surge is largely down to a reduce in inflationary pressures over the course of this year.

Fed Chairman Jerome Powell’s speech will be closely monitored to help clarify whether the aggressive cut was a pre-emptive measure to support future risks or a response to immediate economic concerns.

It was the Federal Reserve’s first rate cut since 2020, after the number of jobs added have slowed and the unemployment rate has moved up.

Pound Sterling has been supported by last week’s monetary policy decision, after they left rates unchanged following a pivotal 8-1 vote. The UK economy remains robust and is performing significantly better than the Eurozone and US – GBPEUR & GBPUSD have both been pushed and remain at a multi-year high.

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

The pound continued its upwards trajectory yesterday and briefly touched multi-year highs against both the US Dollar and the euro.

This was partly helped by comments yesterday from the Bank of England governor ‘Andrew Bailey’, that UK interest rates will come down, but that progress in this direction will be slow.

Last week, the Bank of England left its interest rates unchanged at 5 percent, whilst the FED cuts its interest rate down by 50 basis points.

There are expectations that the pound can retain its upside momentum, as long as the UK remains in the slowlane when it comes to interest rate cuts.

In terms of data today, we have the French consumer confidence index, followed by the New Home Sales for the US.

Tomorrow, we have the US durable goods, employment and growth figures. All sets of Us data will be closely watched and will clearly affect the dollar should anything disappoint.

On Friday, markets will turn their attention to the US core PCE inflation figure, which is the Fed’s preferred inflation gauge.

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.

The British Pound has rallied to its most significant level against the Euro in more than two years, after registering a substantial 0.65% the day before, bringing it to its highest since March 2022.

Euro exchange rates fell after PMI data revealed that the Eurozone economy contracted in September, with substantial slowdowns in activity in France and Germany.

Meanwhile, in the United States, the gap between the services and manufacturing sectors widened, with the former rising to 55.4 and the latter falling to 47.0.

Looking ahead, the German Ifo for September will be the most notable release of the day. The index is expected to decline modestly from its current low level. In the United States, the Conference Board measure of consumer confidence is expected to improve somewhat. However, the figures are unlikely to alter the market.

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.

We start the week with fresh PMI data being released for the EU and the UK.

Already released this morning, French PMI figures have revealed that the manufacturing & services sector has fallen slightly short of expectations.

The euro has already begun the week on the back foot following the latest data this morning, with the German PMI to follow very shortly, before EU and UK data at 9am.

The pound had a strong ending last week against all its major peers, notably the euro, making for the biggest weekly advance since November 2023. This was helped by a ‘hawkish, Bank of England policy decision, choosing to leave the headline rate as it is for another month.

Sterling benefited as a result of the decision to hold interest rates. The 8-1 vote to maintain the rate at 5 percent signaled that the MPC was in agreement on the need to keep interest rates unchanged. Had more members voted for a cut, the pound may have come under pressure.

Tomorrow, we have the German IFO business climate due, followed by the US Home price index and conference board survey.

Last week, the FED cut its rates by 50 basis points, with a further rate cut expected in the coming months.

Later in the week, a number of FED policy makers will be talking and should give further clues on the expected rate cuts.

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.