CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

UK inflation beats forecasts; GBPUSD remains near $1.20

10:20 14 August 2019

Summary:

  • UK CPI Y/Y: +2.1% vs +1.9% exp. 2.0% prior

  • GBPUSD remains near recent lows

  • Is the move on Tariff delays fading?

 

Price pressures in the UK rose faster than expected in July with the CPI Y/Y coming in at 2.1% against a consensus forecast of 1.9%. The core reading also ticked higher by 10 basis points to 1.9% against an expectation for no change. With the Bank of England recently stating that they were to become more data dependant this latest release could well be seen as supporting a hike with the headline reading now back above the 2% threshold for only the second time this year.

UK inflation has ticked up in July and remains close to the BoE’s 2% inflation target. Source: XTB Macrobond

 

Having said that, despite Governor Carney’s insistence that the Bank’s next move could be either higher or lower the consensus opinion remains very much that they won’t move before the October 31st Brexit deadline, and the most likely move after that would be to cut rates. As such this data will unlikely provide any lasting upside in the pound and the currency continues to languish around the recent lows just above the $1.20 handle.  

GBPUSD continues to trade near recent lows after ending last week with its lowest closing price since 1985! Source: xStation 

 

Markets pause after moves on Tariff news 

There were some sharp moves across several asset classes Tuesday afternoon with equities, oil and USDJPY surging while bonds and precious metals tumbled after the US Treasury announced a delay to some new tariffs on consumer goods that were set to take effect at the start of next month until mid December. There was also a decline seen in Bitcoin with the cryptocurrency continuing to exhibit an increasingly positive correlation with Gold. The decision represents a potential thawing in the frosty US-China trade tensions and with more talks set before the month is out there is the potential for more progress in the coming weeks. As of yet it remains to be seen whether this change of stance has a lasting impact on the markets with there being a lack of follow through thus far. 

 

Any overexuberance was kept in check overnight with the latest round of data from Beijing showing a further slowdown as both industrial production and retail sales in China fell further than expected with the former hitting its lowest level in 17 years! The current session for risk assets could well prove pivotal; further gains and higher closes in stocks would go some way to suggest that the recent sell-off is over whereas on the other hand a failure to move above Tuesday’s high would offer bears another chance to push lower.     

 The US 10-year bond has retraced the bulk of the declines seen after the news broke that tariffs had been delayed. The lack of follow through could be a warning sign that the moves across other asset classes may not last. Source: xStation 

 

This content has been created by X-Trade Brokers Dom Maklerski S.A. This service is provided by X-Trade Brokers Dom Maklerski S.A. (X-Trade Brokers Brokerage House joint-stock company), with its registered office in Warsaw, at Ogrodowa 58, 00-876 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. X-Trade Brokers Dom Maklerski S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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