A Look at the Day Ahead in European and Global Markets from Tom Westbrook This morning’s UK inflation data could be the toast of the trading desks if they follow US and Canadian updates and downside surprises.
A tentative rally in gilts is about to spread and the British pound could probably say goodbye to the strong side of $1.30. Forecasts put Britain’s annual CPI falling to 8.2% in June and the underlying share at 7.1%. Those are stunning levels, so a return to high-side upsets would be unpleasant.
Markets have already priced in another 100 basis points of Bank of England rate hikes this year, and following dovish comments from the European Central Bank’s Klass Knot, the BoE may find itself rising rather quickly on its own. New Zealand sounded a warning in the Asia session, with food prices keeping annual headline inflation higher than expected at 6%. Traders took this to mean New Zealand interest rates would have to stay higher for longer and briefly raised the kiwi.
Under the hood in Canada, an average of the Bank of Canada’s two measures of core inflation has barely budged at 3.8%. Elsewhere, the slowdown in China’s economy casts a bit of a shadow over the encouraging data and corporate earnings in the US.
The Hang Seng lost another 1% on Wednesday and is down around 5% for the year. Netflix, Tesla and Goldman Sachs report the results later in the day. On Tuesday, markets welcomed better-than-expected earnings at Morgan Stanley and other big banks, as well as Microsoft flexing its AI muscles by announcing new fees for features within its office software, sending shares up 4%.
Key events that could influence markets on Wednesday: Data: UK CPI, Eurozone final CPI, US housing starts.
Speakers: Dave Ramsden of the Bank of England. Earnings: Netflix, Tesla, Goldman Sachs.
(This story has not been edited by Devdiscourse staff and is automatically generated from a syndicated feed.)
Discover more from PressNewsAgency
Subscribe to get the latest posts sent to your email.