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  • richard evans

BoEs Pill warns it is too early to declare victory on inflation

Good morning

No surprise that we’ve seen very little movement over the past day or so with GBPUSD now 1.2535, EURUSD 1.0905 and USDJPY 149.60. GBP did have a little test higher yesterday morning after a decent set of PMI numbers but 1.2560 capped the upside, a level that I seem to recall talking about back in August/September, but for me 1.2620, another level I talked about back then, is more important.

BoEs Pill has made it clear the fight against inflation is far from over and much too early to declare victory, ECBs Villeroy was a bit more certain, saying ECB will not be raising rates again, assuming there are no nasty surprises although ECB minutes show they are leaving the door open for higher rates for the time being. GBPEUR just around 1.1500 as I type, not far off the highest level seen so far this week.

Japan inflation numbers came out higher than expected but USDJPY is at the same level it was before the release, having traded a range of 149.20-149.70 overnight. Some ongoing talk of Japan eventually having to tighten but unlikely to happen in Q1 2024. Elsewhere in Asia, China have released a statement saying there are no new pathogens in the childrens illnesses I mentioned yesterday.

Gold is struggling to hold anything above $2000, still that $2009 level caps the upside as it did back in late October. We’ll continue to see sellers ahead of there, with stops lurking just above.

US markets will be closing early today which suggests a slow end to the week although we do have US PMIs out later, they always offer some market-moving potential.

A four-day pause in fighting in Gaza has started and hostages are due to be released by both sides this afternoon. The truce will not be easy, both sides have soldiers in forward positions and I would not be surprised if some skirmishes still took place. Imagine if one of the top Hamas leaders popped up, I’d imagine Israel would not hesitate to act. The four-day truce can be extended if more hostages are released. We hope for the best.

Looks like it’ll be a dry weekend but its going to get cold with overnight temperatures turning negative. There is yet another huge pile of leaves in the garden but they’ll have to wait as I’m heading off to the Peak District tomorrow. Must remember to pack some warm clothes! Premier League action returns after the international break, Spurs take on Aston Villa, both teams are just one point apart, as such this is quite a key match for the ‘also-rans’. As usual, I can’t say I’m overly confident given the injury problems and suspensions in the Spurs squad, Spurs are slight favourites though. Abu Dhabi F1 as well this weekend.

Judging by the number of offers in my email inbox, Black Friday sales are better than ever! However I see some Amazon staff have gone on strike, Amazon assure us customers will not be affected and I have to say I’m inclined to believe them. Maybe deliveries will be a day later but given a lot of their stuff arrives next day, it isn’t really too much of a problem.

Have a great weekend. Just one month to go until Christmas eve….

- 09.00 German IFO

- 10.00 ECBs Lagarde speaks

- 13.00 ECBs de Guindos speaks

- 13.30 CAD retail sales

- 14.45 US S&P manufacturing, services PMI

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