November 15, 2022
Daily Report 15/11/2022
Sterling made a fresh move against the dollar in early Europe on Monday, but failed to sustain and again met selling pressure after the New York open. Sterling was vulnerable to a correction against the dollar after sharp gains over the second half of last week and overall confidence in UK fundamentals remained weak, especially with fiscal tightening plans to be released on Thursday. With a tightening of fiscal policy, markets expect that the Bank of England will adopt a dovish policy stance, especially in global terms. CFTC data recorded a small decline in Sterling shorts according to the latest data. UK labour-market data recorded a small increase in the unemployment rate to 3.6% from 3.5%, but there was a further solid employment increase for October. Average earnings increased 6.0% in the year to September from 6.1% with the data overall providing limit net Sterling support.
7.00 ILO Unemployment Rate Act. 3.6% Exp. 3.5% Prev. 3.5%
Euro-Zone industrial production increased 0.9% for September with a year-on-year increase of 4.9% from 2.8% previously and significantly above consensus forecasts. After a hesitant stance, the Euro posted a fresh advance after the European open with a net gain against the dollar. The Euro, however, was unable to break above Friday’s highs and the single currency overall tended to correct lower after a strong advance since last week’s US inflation data. ECB council member Panetta stated that a tight monetary policy is needed to ensure that inflation does not become entrenched and must increase interest rates further, although he added that it must not act too fast to unnecessarily exacerbate a downturn.
10.00 Gross Domestic Product (QoQ) (Q3) Exp. Exp. 0.2% Prev. 0.2%
10.00 Gross Domestic Product (YoY) (Q3) Exp. Exp. 2.1% Prev. 2.1%
Fed Governor Brainard stated that it will be appropriate soon to move to a slower pace of interest rate hikes. By moving at a more deliberate pace, the Fed can assess more data and better adjust the path of rates. She added that the most recent data suggests core PCE prices might be showing some reduction. The comments overall had a dovish tinge with markets expecting that there might have been a stronger push back against the sharp shift in market expectations. The latest CFTC data recorded a decline in long, non-commercial dollar positions to the lowest level for over a year, limiting scope for further position adjustment.
No Key Data