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  • richard evans

GBP slips on lower than expected inflation numbers

Good morning


US dollar jumped around over the US inflation release, the initial move was a higher dollar, then lower, then higher again….and repeat…. As things settled down, USD strength did seem to be the winner, with GBPUSD down to 1.2145 and EURUSD to low 1.07s but overnight both pairs were pretty much back up to pre-release levels. Feds officials speaking through the afternoon offered nothing out of the ordinary, with very much a ‘still got a way to go’ feel about it all. Those hoping for Fed rate cuts later in the year could be disappointed.

EURUSD is holding above 1.0700 for the time being but GBP took a tumble after the UK inflation numbers this morning came out softer than expected, GBPUSD moving from 1.2140 down to 1.2070, dragging GBPEUR down with it from 1.1335 to 1.1275. Mind you I don’t really need to add headline y/y inflation at 10.1% is still extremely high.


Latest reports suggest Russia are building up fleets of jets and helicopters close to the Ukraine border, presumably to support the renewed offensive that is expected to begin soon. NATO are meeting today and are likely to discuss Ukraine’s recent request for fighter jets and the build-up of Russian planes makes this all the more likely. I also read that Moldova are concerned Russia may be planning to take control there as it seeks closer ties with EU. The region is increasingly unstable and Russia seem to have zero plans to stand down. Things haven’t been going well for them, but I’ve said many times before, I am more concerned about what they will do if backed into a corner.


Highlight of today likely to be US retail sales, a strong reading is expected which should support USD but maybe not be enough to push it higher. No Fed officials speaking today although they have recently had less market impact anyway given they are all giving pretty much the same message. Lagarde dopes speak today, could be of more interest if we get any further clues as to her thoughts on ECB policy.


So with everything going on in the world, it is a bit of a surprise that one of the main headlines here is that a man has been convicted of stealing 200,000 cadbury crème eggs. A prison sentence is likely. ‘Eggsellent’ work by the police…….



- 10.00 EU industrial production

- 13.30 US retail sales

- 14.00 ECBs Lagarde speaks

- 23.50 Japan trade

- 00.00 AUS consumer inflation expectations

- 00.30 AUS unemployment



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