UK wages are growing at close to a record pace. German Inflation prints at 10% YoY
December 13, 2022
GBP/USD 1.2292 GBP/EUR 1.1661 EUR/USD 1.0541 USD/CAD 1.3629 EUR/CHF 0.98775 EUR/SEK 10.8830 EUR/NOK 10.4700 EUR/DKK 7.4386 USD/ILS 3.4341 AUD/USD 0.6767 NZD/USD 0.6395 USD/SGD 1.3555 USD/JPY 137.59 USD/CNH 6.9869 USD/INR 82.806 EUR/ILS 3.6193 GBP/ILS 4.2205 USD/ZAR 17.6440
Figures out this morning show that UK wages are growing at close to a record pace, maintaining pressure on the Bank of England to keep hiking interest rates despite a worsening economic outlook. Average earnings (excl bonuses) were 6.1% higher in the three months through October. This jump reflets the labor shortages within the market.
GBP has been mixed this morning however now sits up 0.17% vs the USD and 0.13% vs EUR, since yesterdays close.EUR
The recent EURUSD rally has started to calm ahead of the Christmas break, with the pair trading only 10bps higher on the week so far.
European equities recovered yesterday’s losses, rallying ahead of US CPI this afternoon. The Stoxx 600 gained 0.1% supported by energy and technology stocks in particular. The cold weather across Europe has seen energy prices soar, with prices in Germany as high as €800 per megawatt-hour this morning.
German Inflation printed in line with forecasts at 10% YoY whilst ZEW Economic Sentiment improved on estimates.USD
Fed officials are expected to increase their 2023 unemployment projections for a third consecutive time amid warnings that their inflation-fighting campaign increasingly risks tipping the US economy into a recession.
US CPI prints later today – markets expect 7.3% increase YoY. US household expectations for inflation in the year ahead fell last month to the lowest level since August 2021. Investors and economists widely anticipate the Fed will raise their benchmark interest rate above 4% for the first time since 2008 tomorrow as they continue aggressively tightening monetary policy in a bid to keep expectations in check.
Sam Bankman-Fried was arrested by Bahamian police after the US filed a criminal indictment. The SEC is suing him for defrauding investors of $1.8billion.ASIA/PACIFICUS CPI printed 7.3% last month - markets were muted before the data. Treasuries and the dollar were steady while futures edged higher after yesterday's surge. Commodities including oil, precious metals, copper and wheat advanced.ILS
USDILS has been mixed since the start of the week trading within a 0.81% range.Data & Events
US – CPI, Fed meeting starts
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