Sterling Drops as UK Inflation Falls More Than Expected, BoE Rate Cut Likely in Nov
| Action Insight Daily Report 10-16-24 |
Sterling Drops as UK Inflation Falls More Than Expected, BoE Rate Cut Likely in Nov |
Sterling has taken a significant hit after UK inflation data for September showed sharper-than-expected decline, falling below BoE's 2% target again, and hit the lowest level in over three years. Core CPI also fell more than forecasted, indicating a stronger pace of disinflation. Services prices, a key inflation driver, showed a marked slowdown, reinforcing the view that inflationary pressures in the UK are easing at a quicker pace than anticipated. This latest data bolsters the case for BoE to resume monetary easing, with market expectations now favoring a 25bps rate cut at the next meeting on November 8. The clear signs of weakening inflation give BoE room to act more decisively in its removing monetary restrictions to support growth. Meanwhile, the New Zealand Dollar also faced downward pressure following data that confirmed a sharp decline in inflation during Q3, reaching its lowest level since early 2021. This data supports RBNZ's earlier 50bps rate cut, and reinforces expectations that another large cut could follow on November 27. RBNZ’s aggressive stance is likely to continue as inflation in New Zealand continues to cool more quickly than it expected.... |
GBP/USD Daily Outlook Daily Pivots: (S1) 1.3039; (P) 1.3071; (R1) 1.3106; More... Immediate focus is now on 1.3000 cluster support (38.2% retracement of 1.2298 to 1.3433 at 1.2999) in GBP/USD as fall from 1.3433 short term top extends. Decisive break there will argue that whole rise from 1.2298 has complete,d and bring deeper fall to 61.8% retracement at 1.2732. On the upside, above 1.3102 minor resistance will turn bias back to the upside for rebound... | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 21:45 | NZD | New Zealand CPI Q/Q Q3 | 0.60% | 0.70% | 0.40% | | 21:45 | NZD | New Zealand CPI Y/Y Q3 | 2.20% | 2.20% | 3.30% | | 23:30 | AUD | Westpac Leading Index M/M Sep | 0.00% | -0.10% | 0.00% | | 23:50 | JPY | Machinery Orders M/M Aug | -1.90% | -0.10% | -0.10% | | 06:00 | GBP | CPI M/M Sep | 0.00% | 0.10% | 0.30% | | 06:00 | GBP | CPI Y/Y Sep | 1.70% | 1.90% | 2.20% | | 06:00 | GBP | Core CPI Y/Y Sep | 3.20% | 3.40% | 3.60% | | 06:00 | GBP | RPI M/M Sep | -0.30% | 0.10% | 0.60% | | 06:00 | GBP | RPI Y/Y Sep | 2.70% | 3.10% | 3.50% | | 06:00 | GBP | PPI Input M/M Sep | -1.00% | -0.50% | -0.50% | | 06:00 | GBP | PPI Input Y/Y Sep | -2.30% | -2.20% | -1.20% | -1.00% | | 06:00 | GBP | PPI Output M/M Sep | -0.50% | -0.30% | -0.30% | | 06:00 | GBP | PPI Output Y/Y Sep | -0.70% | -0.60% | 0.20% | | 06:00 | GBP | PPI Core Output M/M Sep | 0.00% | 0.10% | | 06:00 | GBP | PPI Core Output Y/Y Sep | 1.40% | 1.30% | | 12:15 | CAD | Housing Starts Y/Y Sep | 235K | 217K | | 12:30 | CAD | Manufacturing Sales M/M Aug | -1.50% | 1.40% | | 12:30 | USD | Import Price Index M/M Sep | -0.30% | -0.30% |
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