UK Inflation Data Triggers Sterling Slump and Shift in BoE Rate Cut Expectations
| Action Insight Mid-Day Report 12-20-23 |
UK Inflation Data Triggers Sterling Slump and Shift in BoE Rate Cut Expectations |
Sterling faced a broad decline today following release of UK CPI data, which indicated that inflation slowed more significantly than anticipated. This unexpected deceleration in inflation has led markets and economists to quickly adjust their expectations for BoE rate cut. The markets are now fully pricing the first 25bps reduction as early as May, with projections suggesting interest rates could drop to 4% or lower by the end of 2024. Notably, Goldman Sachs has also moved forward its forecast for BoE's interest-rate cut from June to May... |
GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.2661; (P) 1.2711; (R1) 1.2782; More... GBP/USD dips notably today but stays well above 1.2499 support. Intraday bias remains neutral first. While more consolidations could be seen, further rally is still expected. On the upside, firm break of 1.2793 will resume the rally from 1.2036. Next target is 61.8% projection of 1.2068 to 1.2731 from 1.2499 at 1.2909. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:50 | JPY | Trade Balance (JPY) Nov | -0.41T | -0.75T | -0.46T | -0.50T | | 00:00 | AUD | Westpac Leading Index M/M Nov | 0.10% | 0.00% | | 07:00 | EUR | Germany Gfk Consumer Climate Jan | -25.1 | -27 | -27.8 | -27.6 | | 07:00 | EUR | Germany PPI M/M Nov | -0.50% | -0.40% | -0.10% | | 07:00 | EUR | Germany PPI Y/Y Nov | -7.90% | -7.50% | -11% | | 07:00 | GBP | CPI M/M Nov | -0.20% | 0.20% | 0.00% | | 07:00 | GBP | CPI Y/Y Nov | 3.90% | 4.30% | 4.60% | | 07:00 | GBP | Core CPI Y/Y Nov | 5.10% | 5.50% | 5.70% | | 07:00 | GBP | RPI M/M Nov | -0.10% | 0.30% | -0.20% | | 07:00 | GBP | RPI Y/Y Nov | 5.30% | 5.80% | 6.10% | | 07:00 | GBP | PPI Input M/M Nov | -0.30% | -0.60% | 0.40% | | 07:00 | GBP | PPI Input Y/Y Nov | -2.60% | -3.30% | -2.60% | | 07:00 | GBP | PPI Output M/M Nov | -0.10% | -0.10% | 0.10% | 0.30% | | 07:00 | GBP | PPI Output Y/Y Nov | -0.20% | -0.50% | -0.60% | -0.30% | | 07:00 | GBP | PPI Core Output M/M Nov | 0.00% | 0.10% | | 07:00 | GBP | PPI Core Output Y/Y Nov | 0.20% | 0.20% | 0.40% | | 09:00 | EUR | Eurozone Current Account (EUR) Oct | 33.8B | 27.0B | 31.2B | | 13:30 | USD | Current Account (USD) Q3 | -200B | -197B | -212B | | 15:00 | USD | Existing Home Sales Nov | 3.78M | 3.79M | | 15:00 | USD | Consumer Confidence Dec | 103.9 | 102 | | 15:00 | EUR | Eurozone Consumer Confidence Dec P | -16.5 | -16.9 | | 15:30 | USD | Crude Oil Inventories | -2.3M | -4.3M | | 18:30 | CAD | BoC Summary of Deliberations |
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