Wednesday 15 November 2023
Yesterday saw the eagerly antincipted US CPI data and with core at 0.23% mm versus market estimates of 0.3%-0.4% we've seen a large sell-off in the US Dollar with all remaining expectations of Fed rate hikes now off the table despite recent rhetoric from Powell and other Fed heads.
These markets are ever-fickle and given the recent tight ranges needed a decent move it certainly got one with bond yields tumbling too amid forecasters now talking FOMC cut in May. UK CPI data this morning also pointed to the downside again but did little to dent the Pound's rally albeit helping to cap. Today bring US PPI and Retails to throw into the mix. The ongoing Middle East back-story sadly continues meanwhile and casts its own shadow over markets but not driving them atm.
Equities understandably rallied strongly yesterday post-CPI and remain underpinned as European trading gets underway while WTI is testing $77.50 again after capping around $79.50 in the post-data rally as sellers prevail with global demand concerns continuing. Gold has enjoyed the softer interest rate outlook but capping into $1975 this time amid the better risk tones after holding $1935 as the jury remains out.
GBPUSD: Holding 1.2250 then 1.2300 and a sharp spike to 1.2400 amid the initial USD supply post-CPI and then further moves to test 1.2500 as the Greenbck continued to fall. GBPJPY better risk demand tempered by USDJPY retreat. I remain poised for further rally sells when momentum fades.Some options in play potentially. EURGBP: Good two-way business again amid the varying core-pair rallies.Support at 0.8690 after a couple of failures at 0.8730. More two-way expected amid the core pair fluctuation. GBPJPY: Holding 186.30-50 then spiking to 188.30 amid the GBPUSD rally and firmer risk sentiment. Sellers still poised amid possible MOF/BOJ intervention and in retreat to 187.40 as I type but Underpinned again for the moment
EURUSD: Support at 1.0700 before the data-led cpike to 1.0800 then 1.0890 helped by EURJPY demand. I remain a rally seller overall still. USDJPY: Rapid drop from 151.80 to 150.80 post-data then 150.20 before some support helped by better risk JPY supply. I remain a rally seller as preferred side overall at these elevated levels. MOF/BOJ cast a shadow still but some heat off for the moment amid the natural USD supply.
For more detailed analysis across a variety of pairs email mike@mspfx.co.uk
Interbank rates: 08.46 GMT
GBPUSD 1.2465
EURUSD 1.0871
EURGBP 0.8721
GBPEUR 1.1465
USDJPY 150.47
GBPJPY 187.54
GBPCAD 1.7084
GBPCHF 1.1080
GBPZAR 22.6680
GBPHKD 9.7141
USDCHF 0.8877
EURCHF 0.9651
EURHKD 8.4728
AUDUSD 0.6510
NZDUSD 0.6038
USDCAD 1.3684
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