Tuesday 5 December 2023
Markets are still firmly focussed on Central Bank rate cuts in 2024 as inflation eases but we've seen some further correction of the recent focus on USD amid a wider appreciation of all major CBs as I've warned here recently but all remains in the balance. Gold has given up its recent gains and oil still looking soggy.
The RBA left rates on hold but with less hawkish rhetoric than expected and that's brought some AUD supply. BOC next CB off the rank tomorrow, US Fed 13th, BOE, ECB and SNB 14th then BOJ wrapping things up on the 19th. The ongoing Middle East back-story sadly continues meanwhile and casts its own shadow over markets but still not driving prices. US ISM services data today with NFPs lurking on Friday.
Equities fell in NY and then further in Asia as the correction continued but higher in early European trading as I type with the jury still out. WTI capped at $75.00 but holding $72.80-00 as the retreat resumed but rising along with equities since. Gold capped at $2070 after those heady highs of $2148 and we've since seen a further retracement to look at $2020. Heady times still for gold traders and symptomatic of how fickle these markets are.
GBPUSD: Holding 1.2600 in yesterday's retreat before rallying into the pivotal 1.2650-60 area. I remain poised for further rally sells when momentum fades but caution still required for the moment as we range tightly. EURGBP: Support at 0.8550-60 still but capping above 0.8585 this time. Jury still out but CB rate divergence in play for the moment. GBPJPY: Capping at 186.20 this time amid the variable risk tones but holding 185.00 amid some core pair support still. Sellers remain poised.
EURUSD: Support now around the old 1.0800 line after capping at 1.0860 and retreating on the general EUR supply and USD demand but options in play helping to support. I remain a rally seller overall still. USDJPY: Capping at 147.50 this time amid the softer risk JPY demand but holding 146.65 so far. I remain a rally seller as preferred side overall at these still elevated levels.
For more detailed analysis across a variety of pairs email mike@mspfx.co.uk
Interbank rates: 08.45 GMT
GBPUSD 1.2627
EURUSD 1.0834
EURGBP 0.8581
GBPEUR 1.1654
USDJPY 147.08
GBPJPY 185.71
GBPCAD 1.7126
GBPCHF 1.1040
GBPZAR 23.7250
GBPHKD 9.8387
USDCHF 0.8731
EURCHF 0.9460
EURHKD 8.4453
AUDUSD 0.6574
NZDUSD 0.6153
USDCAD 1.3560
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