US inflation came in higher than expected yesterday, causing longer term treasury yields to climb once again, equities to drop, and USD to bounce back retracing 50% of the previous 6 days of losses. On the back of equities dropping, both EUR and GBP also slumped.
UK GDP came in line with expectations for the month of August at 0.2%. But nonetheless, this was not seen as a positive, with the market consensus that the UK will fall into a recession by the end of the year. UK GDP in September will have to be 0.4% to avoid negative growth for the third quarter.
* Daily move - against G10 rates at 7:30am, 13.10.23
** Indicative rates - interbank rates at 7:30am, 13.10.23
Plenty of speakers from central banks today, as well as the sentiment figures from the University of Michigan. But following on from yesterday's big moves on those inflation numbers, as well as risk aversion on geopolitical tensions, we would expect yesterday's moves to continue. It seems that the longer term trend of USD gaining is set to gain traction again.
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