Summary:
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UK CPI Y/Y: +1.7% vs +1.8% exp. +1.7% prior
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Barnier and Boirs meeting in focus for GBP traders
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GBPUSD remains close to 5-month high of $1.28
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Open account Try demo Download mobile app Download mobile appThe current week is the busiest of the month as far as UK economic data is concerned, however this has been almost entirely overshadowed by the latest developments on the Brexit front. Inflation for September remained flat according to the most recent release, with the headline CPI Y/Y remaining at 1.7% despite an expectation for a small uptick. The core CPI Y/Y rose to 1.7% as was forecast but on the whole it seems that there has not been much change in inflationary pressures.
UK inflation has fallen back below the BoE’s 2% target in recent months but could be levelling of not far beneath the threshold. Source: XTB Macrobond
As has been the case for the past week or so, markets remain highly sensitive to Brexit headlines with several scheduled events throughout the day possible catalysts for sharp moves. This afternoon Barnier is set to brief EU ambassadors before Boris Johnson chairs a cabinet meeting and addresses the 1922 committee. At the moment we’re seeing pretty wild swings several times a day as comments from either side hit the news and this will likely continue into the weekend - and possibly beyond.
The tone of the latest remarks has been a little bit less optimistic on the whole with concerns growing that even if a deal can be reached it may not pass through parliament. While the latest Brexit situation remains in a state of flux, overall markets seem to remain fairly hopeful that a deal can be reached with the pound trading not far from its highest level against the US dollar since May which was made just yesterday.
GBPUSD rose to the $1.28 handle yesterday to trade at its highest level since May. The pair has rallied an incredible 600+ pips in less than a week on hopes that a Brexit deal will be secured. Source: xStation
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