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Market Update

• Posted by currencies in Bank of England, Budget, Currency, Dollar, EUR, Fed, GBP, Inflation, Rate Cuts, Rate Hikes, Sterling, UK, Uncategorised
• October 2, 2023
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The month ended with GBPEUR at 1.1530 and GBPUSD at 1.22- over all the month of September was not very supportive for the Sterling and we saw a lot of weakness to end the quarter- although we have also seen a weaker Euro alongside a weaker Pound, it seems traders have found more value shorting the Pound as it was one of the better-performing currencies at the beginning of the year.

The Bank of England will not be meeting in October, in fact the only interest rate decisions this month are Australia, New Zealand, Canada, Europe and Japan. Current expectations is that all of these banks keep rates on hold- however I feel Canada is now dealing with higher inflation due to oil prices so we could see a hike there and also potentially in Europe.

This week we do have a few data releases of note, of course it is the first week of the month so we will have NFP’s out on Friday- but before that, we have Nationwide Housing prices on Monday for the UK, where we are expecting to see contractions in UK house prices, we also have UK manufacturing PMI where we are expecting to see positive figures, still not at the 50 target, but an improvement from last month. We also have U.S ISM manufacturing which is expected slightly higher which will be good for the U,S Dollar. On Tuesday the only real announcement is the RBA interest rate decision where rates are expected the remain the same.

On Wednesday we begin the day with the RBNZ interest rate decision, also expected to remain unchanged, followed by UK Services PMI which is expected in lower (Negative for Sterling) and European retail sales numbers. We also have U.S ADP employment numbers which are expected to show lower jobs numbers in the U.S and PMI numbers for the U.S.

Thursday is pretty U.S- Centric day with Balance of trade coming out, Jobless claims and numerous speeches from Fed members- there are currently no expectations released for these pieces however I would suggest U.S Data has been coming in positive recently so to expect the same would not be farfetched. Overall we do have a busy week, especially if you are trading with the U.S Dollar- if you have any questions or would like any analysis please don’t hesitate to contact me.