GBP
Sterling reacted positively to Rishi Sunak’s elevation to PM last week, with the appointment restoring fiscal credibility and reducing the political risk premium that had previously been attached to UK assets.
Subsequently, cable chalked up a third straight weekly advance, its best run since February, taking the pound north of 1.16 once more.
Looking ahead, Thursday’s BoE decision highlights this week’s calendar, with the Old Lady set to raise rates by 75bps, though the potential for dovish disappointment is high.
EUR
The ECB’s second 75bps hike in a row failed to boost the common currency last week, with investors disappointed about the lack of detail on QT, while becoming more attune to growth headwinds facing the bloc’s economy.
Nevertheless, the EUR did manage to notch back-to-back weekly gains against the greenback, though this owed more to dollar softness than any other factor.
This week, today’s inflation figures, as well as the latest PMI surveys, provide the main notable calendar events.
USD
Amid a broad improvement in risk appetite, and a chunky decline in Treasury yields, the dollar slipped last week, falling to 1-month lows against a basket of peers.
Despite this, both sides of the dollar smile do still look to work in the buck’s favour, with the Fed continuing to hike aggressively, and global growth rapidly slowing.
This week, the Fed highlight proceedings, with a fourth straight 75bps hike expected, while markets will also keep a close eye on Friday’s jobs report.
World News
The British government delayed the announcement of its plan to repair the country’s public finances by more than two weeks to 17th November saying it wanted to ensure the programme reflected the latest and most accurate economic forecasts. Following the election of Rishi Sunak as the UK Prime Minister, markets have stabilised and trended upwards following the chaos and uncertainty that were seen under Truss. Rishi’s strong economic background has restored more confidence in the markets, it is evident that investors are optimistic with Sunak’s election.
The official purchasing managers’ index for Chinese manufacturing fell to 49.2 this month, down from 50.1 in September, economists had expected a print of 50. According to analysts, readings below 50 indicate a contraction in business activity, while figures 50 above reflect expansion. China has been seen to slowly losing its place as the world’s leading manufacturer.
Data Releases
| Date | Region | Data Release | Forecast | Previous |
| Tuesday 1st November | AU | RBA Interest Rate Decision | 2.85% | 2.60% |
| Tuesday 1st November | US | JOLTS Job openings | 9.75m | 10.05m |
| Wednesday 2nd November | US | Federal Reserve Interest Rate Decision | 4.00% | 3.25% |
| Thursday 3rd November | UK | BoE Interest Rate Decision | 3.00% | 2.25% |
| Friday 4th November | US | Non-Farm Employment Change | 200k | 263k |
| Index | Previous Close | Open |
| FTSE100 | 7047.67 | 7047.67 |
| DAX | 13216.48 | 13254.31 |
| CAC40 | 6273.05 | 6279.7 |