Sterling Weak as BoE Rate Cut Odds Rise, But Downside Limited for Now
| Action Insight Mid-Day Report 10-16-24 |
Sterling Weak as BoE Rate Cut Odds Rise, But Downside Limited for Now |
Sterling is currently the weakest performer in today’s trading, though selling pressure remains somewhat contained for now. Weaker-than-expected inflation data from the UK further strengthened the case for BoE to cut interest rates in November. More critically, markets are now pricing in a higher probability of another back-to-back rate cut in December. Interest rate futures reflect a 90% chance of two 25bps cuts by the end of the year, aligning with BoE Governor Andrew Bailey's remarks about taking a "more activist" approach to monetary easing. In the broader forex market, Australian Dollar and New Zealand Dollar are following Sterling's weakness. Both currencies are anticipating impacts from tomorrow’s joint press conference featuring China’s Housing Ministry, Finance Minister, People's Bank of China, and National Financial Regulatory Administration. Speculation is building that the Chinese government would announce new support measures to aid the struggling housing market.... |
GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.3039; (P) 1.3071; (R1) 1.3106; More... GBP/USD is still defending 1.3000 cluster support (38.2% retracement of 1.2298 to 1.3433 at 1.2999) for now. On the downside, decisive break of 1.2999/3000 will argue that whole rise from 1.2298 has complete,d and bring deeper fall to 61.8% retracement at 1.2732. Nevertheless, strong bounce from current level, followed by break of 1.3102 minor resistance, will turn bias back to the upside for stronger rebound towards 1.3433. | |
| 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% |
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