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Market reports
Thanim Islam
  • Spanish and French inflation drops further
  • GBPEUR continues to make new highs
  • US job numbers to add to further USD gains?



Enthusiasm of a debt ceiling deal caused USD to slip through the morning. Losses were not sustained, with the USD coming back in the afternoon. Inflation numbers from Spain came in lower than expected and as a result markets trimmed ECB rate hike expectations, which resulted in further divergence between UK and EU rates, taking GBPEUR to a new five-month high.


Market rates

* Daily move - against G10 rates at 5:00pm, 30.05.23

** Indicative rates - interbank rates at 5:00pm, 30.05.23

Data points


  • None today.

Our thoughts

Yesterday's weaker than expected inflation numbers from Spain caused markets to trim rate hike expectations by the ECB this year, so should there be weakness in the numbers from Germany today (ahead of the eurozone numbers tomorrow). Expect markets to trim rate expectations further, continuing the month-long EUR weakness. Data from France this morning also showed that inflation eased more than expected, making the EUR weak early doors today. EURUSD is set to finish lower for the first time since February. US JOLTS job openings will be the first set of job numbers from the US this week, and a strong set of numbers should see the USDhave its fifth positive month since February.

Chart of the day

Lower than expected inflation numbers from Spain yesterday and France this morning continues to cause the market to sell EUR. GBPEUR continues to trade at new five-month highs, and the highs seen on November/December could be in sight soon. Key support levels have been taken out on EURUSD and the year lows could be sight in due course. Lower CPI numbers from Germany today and the EU tomorrow will likely add to further woes for the EUR.

Source: Bloomberg Finance L.P.

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