Lower than expected UK CPI drives down Sterling.
UK CPI failed to meet expectation coming in at 9.9%, this has primarily been attributed to a fall in petrol prices. Though this might help with the cost-of-living crisis, sterling has fallen against the dollar. Investors have taken inflation contracting as a sign that the BOE will cool their path of interest rate hikes if inflation is contained. Cable yesterday traded at a high of 1.1736 and hit a low this morning at 1.1481 a 2.2% swing. The BOE next meet Thursday 22nd (the meeting has been postponed from the 15th).
Inflation figures in the US shocked markets yesterday, month on month it grew by 0.1% from an expected -0.1% and Core CPI exceeded the expected 0.3% coming in at 0.6%. Conversely to the UK these fuelled investors’ expectations that the Federal reserve will hike interest rates at their meeting next Wednesday. The implied odds for a 100bps hike have increased to 50/50.
Putin will be attending a summit in Uzbekistan to end his political isolation with Russia’s relationship with the west at rock bottom. The event will be attended by the leaders of India, Turkey, Iran and most importantly Xi Jingping in his first overseas visit in 3 years.
Xi and Putin and set to meet to discuss the Ukraine war and other ‘international and regional topics’, Kremlin foreign policy spokesman Yuri Ushakov has stated that the meeting is of particular importance.
Economic Calendar
| Expected | Previous | ||
|---|---|---|---|
| 07:00 | GBP CPI y/y | 10.0% | 10.1% |
| 07:00 | GBP Core CPI y/y | 6.2% | 6.2% |
| 07:00 | GBP PPI Input m/m | 0.2% | 0.1% |
| 07:00 | GBP PPI Output m/m | 1.0% | 1.6% |
| 07:00 | GBP RPI y/y | 12.3% | 12.3% |
| 13:30 | USD PPI m/m | -0.1% | -0.5% |
| 13:30 | USD Core PPI m/m | 0.3% | 0.2% |
| 23:45 | NZD GDP q/q | 1.0% | -0.2% |