UK: Weekly FX Market Update 19 October

GBP

• As UK GDP expands by 0.1%, sterling strengthens.

• Bank of England (BoE) Governor Bailey says there is little evidence of second-round inflation effects.

• Will annual UK CPI on Wednesday move higher than last month’s 3.1% reading, encouraging the BoE to hike rates on 5 November?

EUR

• As concerns around France’s fiscal position appear to ease, the euro manages to stabilise.

• However, renewed unrest in France over the weekend turns euro sentiment bearish again.

• Will flash PMI readings on Friday show slow and steady economic expansion?

USD

• Concerns around an AI bubble have prompted investors to seek the safety of Treasuries, pushing yields and the US dollar lower.

• But this is counterintuitive, as both US CPI and PPI rise yet again.

• Will investors focus on AI worries again this week, or look at flash PMI readings in the week to come?

Mon 19 Oct

13:30 CAD CPI

Tue 20 Oct

07:00 GBP Average Earnings Index 10:00 EUR ZEW Economic Sentiment

Wed 21 Oct

07:00 GBP CPI 14:00 GBP BoE Governor Bailey Speaks

Thu 22 Oct

13:30 USD Unemployment Claims

Fri 23 Oct

07:00 GBP Retail Sales

09:00 EUR Flash Manufacturing/Services PMI

09:30 GBP Flash Manufacturing/Services PMI

14:45 USD Flash Manufacturing/Services PMI