FX markets were fairly subdued yesterday, whilst equity markets continued to slump. Richmond Fed’s Barkin sees inflation as elevated but likely to remain stable, noting the labour market may be weaker than official data suggest. He highlighted challenges from delayed economic data.
BoE’s Huw Pill indicated UK price pressures are softer than headline inflation suggests, but cautioned against further interest rate cuts for now. He also stated that he wouldn’t characterise himself as the most hawkish member of the BoE. His comments were interpreted as dovish.
*Daily move - against G10 rates as of 06:00 GMT, 19.11.25
** Indicative rates - interbank rates as of 06:00 GMT, 19.11.25
UK CPI dipped to 3.6% in October, the first drop in seven months, but marginally higher than expected. The core and service numbers also declined. Odds of a cut in December firmed to 85% and GBP is marginally weaker off the numbers. Going into the November 26th budget, GBP volatility will be expected to rise, with last week’s political and fiscal upheaval raising uncertainty that the government may under-deliver on expected tightening. In a worst scenario, a market-unfriendly budget could raise questions over government stability and cause GBP to weaken.
For today, the release of the FOMC minutes, as well as Nvidia’s results which will likely determine market sentiment, will be in focus after hours.
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