Market Insight 13-02-2024

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  • Market Insight 13-02-2024


Market activity was mixed yesterday as traders awaited significant data releases later in the week. Despite central bank speakers like Fed’s Bowman and ECB’s Wunsch expressing reluctance towards immediate rate cuts, FX rates remained largely unaffected. EUR buying was observed as a hedge against potential disappointing UK data, while clients showed interest in placing Limit Orders on GBPUSD and EURUSD ahead of today’s US inflation figures.

Beyond FX markets, notable developments included a trade in the money markets that bets on a 0.75% ECB interest rate cut by June, contrasting with current expectations of a 0.37% cut. Additionally, record-high US equity markets fuelled by consumer spending raised concerns as average credit card debt per US household reached unprecedented levels.

Today’s Market Outlook:

GBP saw a slight strengthening following better-than-expected UK job market performance in the three months leading to December. With key indicators surpassing forecasts, the odds of a June rate cut by the BoE have decreased. Attention now turns to tomorrow’s inflation figures, particularly services inflation, which is anticipated to rise to 6.8%. A higher-than-expected print could drive GBP higher, prompting consideration of Limit Orders to capitalize on potential moves.

The focus for the remainder of the day rests on US inflation numbers, with expectations of further easing to 2.9% for overall inflation and 3.7% for core inflation. A continuation of this trend could weaken USD further, potentially pushing GBPUSD towards the upper range. However, anticipation for UK inflation data tomorrow might constrain afternoon gains until its release.


UK wages growth displayed a milder deceleration than anticipated in the lead-up to December, suggesting a potential delay in the Bank of England’s rate cut timeline from June to August. GBP experienced broad-based gains this morning, with market participants likely awaiting tomorrow’s inflation figures before pursuing further upward momentum.