December 21, 2023
Forex Markets Analysis 20 December 2023
GBPUSD FUNDAMENTAL BACKDROP
- The British pound fell sharply this morning after the UK CPI report showed a significant decline in inflationary pressures on both headline and core metrics respectively
- The impact of restrictive monetary policy measures is now showing as consumers are reluctant to spend thus decreasing demand for goods and services.
- Retail sales figures confirm this and should this trend continue, pound upside may be limited
- Key events today:
- UK inflation
- US Conference Board consumer confidence, existing home sales
- European equity futures and Treasuries rise despite warnings on US interest-rate cuts.
- Benchmarks in Asia advance following Wall Street rally, while China’s gauges edge lower.
- Treasury 10-year yields slip three basis points to 3.91%.
- Contracts for US stocks trade flat.
- Market expectations for Fed easing remain high despite Atlanta Fed President Raphael Bostic stating no urgency to lower rates.
- Bank of America Corp. survey shows investors most optimistic since the beginning of 2022.
- Traders liquidate bets on higher short-term US yields.
- Japan’s benchmark government bond yield falls to lowest since July after Bank of Japan holds policy.
- Nikkei 225 stock gauge rises to highest in more than five months.
- Yen gains for the first time in four days.
- BOJ’s decision to stay on hold likely to support Japanese stocks.
- Chinese banks hold benchmark lending rates following central bank’s decision to skip cutting policy interest rates.
- Richmond Federal Reserve President Thomas Barkin reinforces dovish tone, suggesting US central bank would lower rates if progress on inflation continues.
- Other policymakers push back against rate cut bets.
- Investors await US data readouts, including existing home sales, third-quarter GDP print, durable goods orders, and personal consumption expenditures.
- Alibaba Group Holding Ltd. CEO Eddie Wu to take over the company’s core e-commerce business.
- West Texas Intermediate crude rose 0.2% to $74.08 a barrel
- Spot gold was little changed
My name is Styliana Charalambous, possessing a professional qualification as a Chartered Certified Accountant and a Bachelor’s Degree in Accounting and Finance. Highly motivated financial analyst with expertise in audit and investment strategies. I have several years of experience in the finance industry, as an audit supervisor at KPMG and the Head of Investment & Market Research in a multinational Fintech company.
Passionate about personal finance, investing, and creating finance content on social media. Lecturer in Accounting & Finance at Canterbury Christ Church University. I am the Founder and CEO of Selfmade Academy, an organization that helps thousands of students worldwide to plan for their financial future and make smart decisions about their money