26/07/2024
Written by: Ian Morley
Summary:
The GBP experienced a slight decline by the day’s end after morning job figures hinted at a mild cooling in the UK’s employment sector. Meanwhile, the USD strengthened in the afternoon following higher-than-anticipated CPI data, indicating lingering inflationary pressures in the US. Market sentiment continues to anticipate the possibility of the Fed’s first rate cut in June, with further insights expected in next week’s Fed meeting.
Speeches:
Market Insight:
The morning’s release of UK GDP figures for January indicated a rebound in growth, suggesting signs of economic recovery in the UK. With GDP meeting expectations at 0.2% following December’s -0.1%, the Bank of England might opt to delay interest rate cuts given these positive indicators. Despite this, the GBP remained largely unaffected, possibly indicating that market optimism had already been factored into prices.
Looking ahead, tomorrow’s release of US retail sales data will be closely watched, particularly in the wake of yesterday’s CPI figures. It’s likely that the market will continue to favour the USD leading up to this release.
Analysis:
The current net market positioning on the GBP has reached a six-month high, suggesting a potential overextension in the ongoing bullish trend. This indicates a possibility of a retracement in the GBP’s bullish run.