Mixed data for the UK this week with wages rising to 3.9%, their fastest pace since 2008, which was offset by unemployment also rising to 3.9%. Meanwhile inflation unexpectedly rose to 2.1%, just above the Bank of England target.
The US announced a delay in further tariffs on Chinese goods, with further talks expected in September.
Whilst in Europe, escalating political concerns in Italy are weighing on the Euro.
On the interest rate front, the market is pricing in a 65% chance of a UK rate cut in Q1, whilst in the US the market expects two further interest rate cuts this year. In Europe, we also look for a further cut in rates next month.
On the exchanges, fairly tight ranges continue with lighter volumes as we hit the peak of the holiday season.
GBP/USD found some support ahead of 1.2000 as expected, but sentiment remains extremely weak.
GBP/EUR has also nudged higher, helped by general Euro weakness. There is decent buying interest building just below 1.0700, but we would need an initial break above the pivotal 1.1000 level to aase the current negative sentiment.
|19/8/19||EU CPI YoY||1.3%||1.1%|
|21/8/19||US FOMC Minutes||–||–|
|Indices||Previous Close||YTD % Change|
|DFM GENERAL INDEX||2795||+10.47%|
UK Benchmark Rates
|3 month||0.76813%||2 year||0.69%|
|6 month||0.80163%||3 year||0.66%|
|12 month||0.84900%||5 year||0.62%|
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