The calm before the storm or will BoE Governor Bailey move markets again?
| GBP
| The next couple of weeks ahead are HUGE for financial markets. The UK budget, the latest BoE interest rate decision and of course the US election are all major risk events for Sterling.
But before we report on those and what could happen in the build-up and on release, we have a potential volatile week ahead of us now..
Last week's inflation figure which wildly undershot expectations, may have forced the narrative for how the BoE is to play both November's and December's central bank meetings..
BoE Governor Bailey is due to speak multiple times this week (as are 2 other MPC members) and there could be multiple answers and/or multiple reactions to what he says on interest rates.
This is key to traders and investors who want to know what the bank could be planning before the event to position themselves correctly. Therefore, Sterling will be impacted and potentially by quite a bit depending on what was said and how it has been interpreted..
Elsewhere, the hope is that the UK PMI's can continue there fine form and either stabilize at current 'decent' levels or perhaps supersede just like the UK retail sales result last week, which will then provide GBP with a bump in value.
EUR The Euro also hangs in the balance with a switch of focus from its central bank from fighting inflation to now fighting weak economic growth. 'The economy is somewhat weaker than expected' were the carefully chosen words from ECB President Lagarde with the actual picture looking far worse.
Interest rates are at "restrictive levels' currently in the EU, meaning there is a willingness to move faster and further on interest rates if growth doesn't sharply pick up. This will keep the Euro pinned and subsequent rate cuts will see further devaluation in the currency.
USD The Dollar has been busy making moves of late just in time for election season to really start ramping up. 1% has been gained in the last week across the board and over 2.5% overall in the last month.
The current mid-market rate of £-$1.30 is still favourable even though rates were almost 4-cents higher not too long ago. This is because of interest rate news and economic events elsewhere, plus what could and probably will happen if Donald Trump regains the Presidency..
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Expected mid-market ranges for October 22nd 2024 | | |
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Upcoming Data | Monday 21st October 2024 | N/A
| Tuesday 22nd October 2024 | 14:25 UK - BoE Governor Bailey speech 15:00 EU - ECB President Lagarde speech |
Wednesday 23rd October 2024 | 15:00 US - Existing home sales 15:00 EU - Euro-Zone consumer confidence 15:00 EU - ECB President Lagarde speech 21:30 UK - BoE Governor Bailey speech |
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| Thursday 24th October 2024 | 08:15 EU - French PMI 08:30 EU - German PMI 09:00 EU - Euro-Zone PMI 09:30 UK - PMI 13:30 US - Building permits & initial/continuing jobless claims 14:00 UK - MPC members Mann & Woods speeches 14:45 US - PMI 15:00 US - New home sales 16:20 UK - BoE Governor Bailey speech 21:30 US - Fed balance sheet |
| Friday 25th October 2024 | 00:00 UK - Consumer confidence 07:45 EU - French consumer confidence 08:00 EU - Spanish unemployment rate 09:00 EU - Italian business & consumer confidence 13:30 US - Durable goods
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