Sterling Gains as UK Inflation Accelerates; Euro Struggles Despite Wage Surge
| Action Insight Mid-Day Report 11-20-24 |
Sterling Gains as UK Inflation Accelerates; Euro Struggles Despite Wage Surge |
Sterling posted modest gains today after the UK reported stronger-than-expected rebound in headline inflation for October. More importantly, both core CPI and services price growth also increased, indicating that underlying inflation is gaining momentum. This resurgence in inflation diminishes the likelihood of BoE implementing another rate cut in December. Market expectations have adjusted accordingly, with swaps markets now assigning only a 15% probability to a rate reduction next month. This shift aligns with BoE's recent emphasis on a measured and gradual approach to policy easing. The central bank has stressed the need for additional time to assess the impact of the Autumn Budget before making further monetary adjustments. In contrast, Euro failed to gain traction despite robust wage growth data from the Eurozone. ECB reported that negotiated wages in the third quarter rose by 5.42% yoy, a significant jump from the 3.54% growth in the second quarter. This also marks the fastest wage growth since early 1993. However, Euro remained subdued as concerns over sluggish economic activity overshadowed the inflationary pressures from rising wages. The ongoing weakness in the Eurozone's economic performance is expected to keep ECB on track for another 25b rate cut in December. While the central bank may proceed with this cut, the pace of easing next year is anticipated to slower as policymakers balance the need to support growth with the risks of fueling inflation.... |
GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.2634; (P) 1.2662; (R1) 1.2711; More... GBP/USD's recovery extended higher today but lost momentum well ahead of 55 4H EMA. Intraday bias remains neutral at this point. Outlook stays bearish with 1.2842 support turned resistance intact. On the downside, break of 1.2596 will resume the fall from 1.3433 to 100% projection of 1.3433 to 1.2842 to 1.3047 at 1.2456. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:50 | JPY | Trade Balance (JPY) Oct | -0.36T | -0.15T | -0.19T | -0.27T | | 01:00 | CNY | PBoC 1-Y Loan Prime Rate | 3.10% | 3.10% | 3.10% | | 01:00 | CNY | PBoC 5-Y Loan Prime Rate | 3.60% | 3.60% | 3.60% | | 07:00 | EUR | Germany PPI M/M Oct | 0.20% | 0.20% | -0.50% | | 07:00 | EUR | Germany PPI Y/Y Oct | -1.10% | -1.10% | -1.40% | | 07:00 | GBP | CPI M/M Oct | 0.60% | 0.50% | 0.00% | | 07:00 | GBP | CPI Y/Y Oct | 2.30% | 2.20% | 1.70% | | 07:00 | GBP | Core CPI Y/Y Oct | 3.30% | 3.10% | 3.20% | | 07:00 | GBP | RPI M/M Oct | 0.50% | 0.50% | -0.30% | | 07:00 | GBP | RPI Y/Y Oct | 3.40% | 3.40% | 2.70% | | 07:00 | GBP | PPI Input M/M Oct | 0.10% | 0.60% | -1.00% | -0.50% | | 07:00 | GBP | PPI Input Y/Y Oct | -2.30% | -2.50% | -2.30% | -1.90% | | 07:00 | GBP | PPI Output M/M Oct | 0.00% | -0.10% | -0.50% | -0.40% | | 07:00 | GBP | PPI Output Y/Y Oct | -0.80% | -0.90% | -0.70% | | 07:00 | GBP | PPI Core Output M/M Oct | 0.30% | 0.00% | | 07:00 | GBP | PPI Core Output Y/Y Oct | 1.70% | 1.40% | | 15:30 | USD | Crude Oil Inventories | -0.1M | 2.1M |
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