Steady Start to the Weeks Trading
It was a relatively quiet start to the week’s trading as investors took advantage of a long weekend in the US to reassess markets. European stocks did take a bit of a hit after yields rose on the continent when European Central Bank officials pushed back on rate cut expectations. Currencies had a quiet day, trading in familiar ranges with the dollar grinding slightly higher before close of business. Oil dropped off slightly on the day as some profit taking flow went through despite continued tensions in the Red Sea, in contrast, Gold took a step higher as safe haven buying exerted itself.
A Big Week for Sterling Traders Ahead
It is a huge week for Sterling traders with Inflation data, employment numbers and Retail Sales figures all due out along with an update from the Bank of England as Governor Andrew Bailey testifies before the Lords Economic Affairs Committee. All the aforementioned data releases from the Office of Statistics are key updates but in the current environment, the CPI release probably just pips the other two in terms of market impact. Expectation is for the headline year-on-year data to drop slightly to 3.8%, but if this prints significantly off of expectations then expect the pound to move fast. Currently sterling is trading near recent highs on the cable as well as on some of the crosses and a topside surprise could see it break into fresh ranges.
Markets to See Increased Volatility Today
After a quiet start to the week, traders are expecting volatility to pick up in today’s trading sessions with some key data releases scheduled as well as continued tensions in the Middle East weighing on markets. There is little scheduled to stimulate traders in the Asian session but the first of some key UK data is due out once London opens. The employment data is due early in the session with expectations or the claimant count to increase by 18k and the unemployment rate to remain steady at 4.2%. The North American session see’s the return of US traders and normal liquidity conditions and the initial focus will move north of the border for the release of the latest Canadian CPI numbers which are swiftly followed by the Empire State Manufacturing Index data. Later in the day we hear from Bank of England Governor when he testifies before the Lords Economic Affairs Committee.
