Market insights

Market Comment - 14th December 2022

Good morning,

UK inflation came in at 10.7%. This is slightly better than the anticipated 10.9% but is still way off the desired 2% target set by the Bank of England. The better number was attributed to lower price rises in fuel. However food costs are rocketing which is frustrating in the run up to Christmas. Food prices have risen 16.5% in the last 12 months.

The inflation numbers haven't had much effect on Pound rates however. GBP/EUR barely flinched and is tracking sideways. GBP/USD had a strong surge to the upside yesterday on the US inflation numbers. However the rate has settled down subsequently. This rate might be rattled later when the FED announces its interest rate decision. Analysts are expecting a 50 point (0.5%) hike to 4.5%. Either side of this could cause shockwaves. Yesterdays inflation numbers from the US could have the FED reducing that hike as inflation appears to be slowing down in the States.

It's going to be a lively 24 hours. Besides the US rate decision there's the FED's monetary policy statement, projections and press conference. There's also the New Zealand GDP numbers out later. This is followed by Australian employment data early tomorrow and Chinese retail data.

Business news centres on the inflation numbers with the secondary headlines referring to the strike action happening today on rail networks and postal workers.


Today’s Economic Calendar

US: 19:00 FED Interest Rate Decision

US: 19:00 FED's Monetary Policy Statement

US: 19:00 FOMC Press Conference

US: 19:00 FOMC Economic Projections

NZ: 21:45 GDP Data

AUS: Thursday 00:30 Employment Numbers

CHN: Thursday 02:00 Retail Sales


As ever we look forward to keeping you in the loop and look out for our next update.

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