Market Comment: November 20, 2024
Today’s spotlight is firmly on the UK Consumer Price Index (CPI), which has come in hotter than expected at 2.3% YoY, above the consensus of 2.2%. The Retail Price Index (RPI) also rose significantly to 3.4% YoY, underscoring persistent inflationary pressures. These figures suggest the BoE may hold off on further rate cuts in the near term. Later today, markets will also be paying close attention to key speeches from ECB and Fed officials.
Key Data Out Today
- UK CPI YoY (October): 2.3% (Previous: 1.7%)
- UK RPI YoY (October): 3.4% (Previous: 2.7%)
- UK PPI Output YoY (October): -0.8% (Previous: -0.6%)
- Eurozone PPI YoY (October): -1.1% (Previous: -1.4%)
- ECB President Lagarde Speech
- BoE’s Breeden, Ramsden Speeches
- Fed’s Cook, Bowman Speeches
Energy & Precious Metals
- Crude Oil: Brent at $73.418 (+0.15%), WTI at $69.355 (+0.17%). Energy prices see minor gains as markets weigh supply-side constraints against global demand challenges.
- Gold: Down 0.27% to $2627.95, experiencing slight profit-taking after recent gains, with investor focus shifting to inflation trends and central bank speeches.
- Silver: Down 0.82% to $31.027, mirroring gold’s dynamics and reflecting reduced investor appetite for riskier assets.
Currency Movements
- EUR/USD: Down 0.16% to 1.05904, as markets digest weak Eurozone PPI data, which confirmed a further decline of -1.1% YoY, sustaining deflationary pressures in the region.
- GBP/USD: Up 0.10% to 1. Sterling is gaining traction due to stronger-than-expected CPI and RPI figures. These figures reinforce inflation concerns and could influence future BoE rate moves.
- AUD/USD: Down 0.19% to 0.65285, impacted by risk-off sentiment and subdued demand for commodity-linked currencies.
- NZD/USD: Down 0.29% to 0.59018, facing headwinds as global risk aversion continues to weigh on the Kiwi.
- USD/JPY: Up 0.44% to 155.406, with the yen weakening amid diverging monetary policies between the BoJ and the Fed. Investors await Fed speeches later today for further guidance.
- USD/CNY: Up 0.12% to 7.24184, as the yuan struggles against a stronger dollar and concerns over China’s uneven economic recovery.
- USD/CHF: Up 0.20% to 0.88386, reflecting dollar strength amid cautious market sentiment.
- USD/CAD: Flat at 1.39554, as traders look toward oil price stabilization and upcoming Canadian data for further direction.
- USD/MXN: Up 0.07% to 20.1214, maintaining stability as markets remain cautious of emerging market currencies.
- USD/INR: Flat at 84.3905, with little movement ahead of Fed commentary later today.
Things to Keep a Watch On:
- UK CPI and PPI: UK inflation data shows a notable uptick, with CPI at 2.3% YoY and RPI at 3.4%, suggesting persistent price pressures that could influence BoE policy considerations.
- Eurozone PPI: Producer prices in the Eurozone fell 1.1% YoY, continuing a deflationary trend that may impact ECB decision-making.
- Speeches from ECB, Fed, and BoE Officials: A series of high-level speeches from central bank officials are expected. These include ECB President Lagarde, Fed’s Cook and Bowman, and BoE’s Ramsden. They are likely to provide market-moving insights.
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