Market Report : 14.08.2024

Published: 14/08/2024 By ECAP

An underwhelming figure for UK inflation saw GBP underperform and continue to give ground away to its rivals. Services sector inflation fell to a two-year low meaning both measures rose less than expected in July. Many feel this isn’t enough to secure back-to-back rate hikes, but it does show support to the notion that CPI inflation is tracking to be below its 2% target next year. UK rate futures point to a roughly 47% chance of a Bank of England quarter-point rate cut in September, up from the previous 36%.

The Euro has faced fluctuations due to ongoing economic challenges in the EU, including rising inflation and energy price shocks. The Eurozone's economic situation remains delicate, with increased divergence among member states and a focus on balancing growth with stability. The European Central Bank is closely monitoring these developments to mitigate risks.

The US dollar has recently experienced a rebound, gaining strength against major currencies like the Japanese Yen and the Euro. This recovery follows a period of market volatility driven by weaker US job data and global equity fluctuations. The US sees Consumer Price Index numbers released today which could cause some volatility.

Data supplied by GC Partners