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  • richard evans

Market waits for US GDP and Powell

Good morning

GBP has shown signs of weakness with GBPUSD testing down at 1.1940 a couple of times over the past couple of days. So far holding but pressure does seem to be building to the downside. GBP is lower in the crosses as well, GBPEUR 1.1560 and the likes of GBPAUD at 1.7840 having been well above 1.8000 earlier in the week, despite Aussie inflation come in lower than expected overnight.

EURUSD also showing signs of struggling against USD, now 1.0345, as we await inflation numbers from the EU. A headline HICP of 10.4% seems to be the consensus although if anything the feeling this morning is that we could see a lower headlines, nearer 10%, perhaps after german inflation came out a little lower than expected yesterday. EUR was not heavily impacted yesterday so I’m not sure even a weaker reading today will be the catalyst for EUR weakness.

A lot of attention today on Feds Powell who is speaking after the London close. We do have other Fed officials speaking beforehand and plenty of US data on the calendar including GDP, but the market does seem to be focussed very much on Powell. Watch for any mention of size of Dec rate rise, expecting 50bps, but more importantly any sign that rates may peak higher than the 5% previously suggested. Remember we have seen talk of anything up to 7% recently.

Well done to England for a convincing win against Wales to top the group. Rashford scored two goals, I have to admit that I thought he had a shocking first half performance and I’d probably have taken him off. Shows what I know! England through to the next round where we will take on Senegal. Had we come second in the group we’d have faced Netherlands….not sure which I’d have preferred but Senegal it is. USA also make it through with a win over Iran, they face Netherlands.

We’ll see this evening whether Argentina can get out of their group after losing their first match. Plenty of possible permutations in that group. Before then we have France taking on Tunisia and Australia Denmark. France are through regardless, I think any of the others could make it although Tunisia would have to beat a pretty strong French side.

Just on sporting achievements, I see Emma Raducanu has received an MBE for services to tennis. Now, in fairness she was the first British woman to win a grand slam since Wade in 1977, which is really quite an achievement. But I’d like to think you’d need to put in a few more years in order to talk of ‘services to tennis’. She’s only 20. It’s not that she is a woman or that it is tennis, I feel the same really about any sportsman or woman who wins something and then gets an honour for it, or indeed anyone earning an honour for simply doing their job. They are doing it well, but they are just doing their job. They must surely need to go above and beyond. I know someone who was employed and paid by the government to do a job and then got on the honours list for doing that job. Can’t be right, can it? Maybe I am just envious?

Anyway, get those advent calendars at the ready, it’s December tomorrow. Can’t believe how quickly that has come around. I’ve so far managed to avoid getting the Christmas decorations out but I have a feeling today will be the day. Surely with US GDP and Powell I just won’t be able to step away from the desk and I’m sure I’ll have to work late……..

- 10.00 EU CPI

- 13.15 US ADP employment

- 13.30 US GDP, core PCE

- 13.50 Feds Bowman speaks

- 14.45 US Chicago PMI

- 15.00 US pending home sales

- 17.35 Feds Cook speaks

- 18.30 Feds Powell speaks

- 19.00 Fed beige book

- 01.45 China caixin manufacturing PMI

- 07.00 German retail sales

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