UK Autumn Statement in focus
Thursday 17 November 2022
Yes folks, the widely touted, anticipated and now leaked Autumn Statement finally lands today at 11.30 GMT with an expected austerity package amid the recession forecast to prevail over the next two years. Fin Min Hunt Jeremy Hunt is expected to announce around £30bln in spending cuts and £24bln in tax rises. The market will like the firmer hand on the tiller after the Truss/Kwarteng roadcrash but the overall impact and outlook for the economy still remains grim in the short to medium term.
Yesterday BOE governor Bailey plus other MPC members testified to the parliamentary Treasury Select Committee but produced little of note in what was a very low bar set by the TSC not grasping the basics matched by equally worrying lack of knowledge coming from the MPC bods present. One comment of note was Bailey ruling out BOE intervention on the Pound under his tenure.
Mixed US Dollar tones again this morning after yesterday's US retail sales and export price data negated each other while equities, oil and gold still ranging relatively tightly.
GBPUSD: A solid hold of 1.1830-50 and good two-way business before a further rally this morning to test 1.1950 helped by some general GBP demand ahead of the Autumn Statement. EURGBP: Underpinned around 0.8700 this time after retreating from 0.8730 mid some general GBP demand earlier but rallying again as I type. I expect the two-way business to continue. GBPJPY: Holding 165.00 THEN 165.75 in yesterday's dips but equally capping around 166.25 again this morning.
EURUSD: A solid hold of 1.0350 and looking to test again now after the retreat from 1.0430. Should still see some two-way business with cross flows, risk, Ukraine all in the frame as well as USD flows. USDJPY: Capping at 139.80 this time but heading up there again after a hold of 139.00 as some general USD demand returns this morning as I type. EURJPY: Holding 144.50 again after failing into 145.00 so far. Expect more two-way business. USDCHF: On the rise again after holding 0.9400 then 0.9430 and now testing 0.9475-80 as some USD demand returns. Some support from EURCHF holding 0.9780-00 now but sellers poised still. SNB speakers later today. EURCHF: Support at 0.9780-00 area now with SNB watching but with sellers still poised into 0.9840
AUDUSD: Formed a cap around 0.6750 and now in retreat thru 0.6700 amid some USD demand. I remain a rally seller as my preferred side/strategy. NZDUSD supported at 0.6120 now and testing again after capping at 0.6160. USDCAD: Another hold of 1.3225 and now testing 1.3360 amid fresh USD demand with oil making its mind up still. I think we'll see some two-way business still overall as markets remain ever-fickle.
Let's continue to be careful out there
.Interbank rates: 08.22 GMT