GBP
The pound snapped a 3-week winning run last week, after the Bank of England pushed back aggressively on the interest rate path priced by markets, despite announcing a 75bps hike, the largest move in over 30 years.
Sterling’s weakness took cable back beneath the 1.14 handle and was exacerbated by sizeable dollar demand owing to a hawkish Fed decision, along with shaky risk appetite.
Looking ahead, this week’s calendar is a quiet one, with only Friday’s GDP data of note.
EUR
The common currency also faced headwinds last week, failing to decisively break above parity, with demand for the dollar outweighing any bullish EUR factors once more, though these remain rather thin on the ground.
This week is likely to be something of a similar story, with the calendar devoid of any major market-moving releases.
USD
While the Fed’s 4th 75bps hike in a row briefly boosted the dollar, the buck was unable to hold onto these gains, after markets began to believe the Fed’s hawkish stance may not last much longer, despite Friday’s solid labour market report.
Nevertheless, Friday’s risk-on vibe posed stiff headwinds for the greenback, which now does have a relatively high bar for further appreciation, given how well-priced the Fed’s outlook is.
This week, two main risk events present themselves; Tuesday’s midterm elections, followed by Thursday’s CPI release.
World News
Trump and Biden carry on their campaign as the midterm election looms, where 435 seats are being fought over- it will shape the Biden administration’s ability to pass laws and if enough Trump supporting candidates win, it may be a catalyst for his re-election.
As China pursues its zero covid policy, factory production has fallen as stricter lockdown measures are implemented around China. Companies such as Apple have already warned about new iPhone delays to consumers as a result of lockdown measures in China. Disneyland Shanghai was shut down after a single case was detected and visitors were unable to leave the park until a negative covid test was provided, highlighting China’s strict covid policy.
120 world leaders are meeting at the COP27 summit in Egypt this week, with some already calling out rich nations to pay reparations to those affected by climate change. This week world leaders will be discussing the issue of climate change and global warming, trying to unite to tackle the issues.
Data Releases
| Date | Region | Release | Previous | Consensus |
| Tuesday 8th November | US | Congressional Elections | ||
| Thursday 10th November | US | CPI y/y | 8.20% | 8.00% |
| Thursday 10th November | CA | Bank of Canada Gov. Macklem Speaks | ||
| Friday 11th November | UK | GDP m/m | -0.30% | -0.40% |
| Friday 11th November | US | Prelim UoM Consumer Sentiment | 59.9 | 59.5 |
| Share Index | Prev. Close | Open |
| FTSE100 | 7334.84 | 7334.84 |
| DAX | 13459.85 | 13398.79 |
| CAC40 | 6416.44 | 6379.49 |