GBP climbed initially after the Bank of England elected to hold rates at 5.25%. In the accompanying statement Bailey signalled that rates will need to stay high for an extended period of time, and pushed back against the suggestion of any rate cuts. But by the end of the European trading session, GBP dropped back off again. US treasury yields continued to slide following on from Wednesday Fed meeting, causing the USD to be slightly weaker on the day as well. Equities climbed higher as well.
* Daily move - against G10 rates at 7:30am, 03.11.23
** Indicative rates - interbank rates at 7:30am, 03.11.23
Quite a bit in the diary today with a mix of central bank speakers, UK PMI numbers, Europe’s unemployment numbers, and of course the US job numbers out at 12.30pm. Job additions are expected to slow to 180,000 from the 336,000 in September, with wage growth set to slow to 4%. Should the numbers fall shy of expectations then we would expect treasury yields to drop, USD to weaken further, and equities to climb - taking other risk based assets higher with it.
US job numbers day, and clear to see a trend of a gradual slowing of the jobs market. Only 180,000 jobs expected to be added in October, with wages set to 4% and the unemployment rate set to remain at 3.8%. USD has started the month on the backfoot on falling treasury yields, and any weakness in the numbers seems likely to weaken USD further.
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