November 11, 2022

Daily Report 11/11/2022

Share this:


great british pound icon

Sterling was little changed ahead of Thursday’s New York open with a slight recovery from early lows as it edged against the dollar. Volatility inevitably surged after the US inflation data with substantial gains for the UK currency. Sterling drew direct support from a weaker dollar and also gained important support from much stronger risk conditions. It initially jumped higher and surged to 8-week highs around the European close. The surge on Wall Street continued to underpin Sterling with 8-week highs against the dollar.

No Key Data

Euro logo

Tight ranges prevailed ahead of Thursday’s New York open with caution inevitably prevailing ahead of the latest US inflation data. There was, however, hawkish ECB rhetoric with council member Schnabel stating that there is no time for monetary policy to pause with policy needing to move into restrictive territory.
No Key Data

dollars icon

US consumer prices increased 0.4% for October compared with consensus forecasts of a 0.6% increase with a larger than expected decline in the year-on-year rate to a 9-month low of 7.7% from 8.2% and compared with market expectations of 8.0%. Food prices increased 0.6% on the month for a 10.9% annual increase while energy prices increased 1.8% on the month although with a sharp decline in gas prices. Core prices increased 0.3% on the month with the annual rate slowing to 6.3% from 6.6% and below expectations of 6.5%. Used-car prices declined 2.4% on the month and apparel prices also declined, but there was a further 0.8% increase in shelter prices as rents continued to increase sharply. Following the data, there was a sharp adjustment in Fed Funds futures with markets pricing in just over an 80% chance that the Fed Funds rate would be increased by 50 basis points at the December meeting rather than 75 basis points and peak expectations edged lower. The dollar posted sharp losses on the shift in rate expectations while the surge in equity markets also undermined potential US currency demand with very substantial gains for commodity currencies.

No Key Data