Morning Bid: Britain’s CPI the next frontier

Morning Bid: Britain’s CPI the next frontier

Tom Westbrook provides a preview of the upcoming day in European and global markets. The focus is on the British inflation data, which could have a significant impact on trading desks if it surprises on the downside. This could lead to a rally in gilts and a decline in the value of sterling.

Forecasts suggest that Britain’s annual CPI will fall to 8.2% in June, with core inflation holding at 7.1%. These levels are considered high, so any unexpected increase would be unwelcome. The market has already priced in additional rate rises from the Bank of England, and if the European Central Bank remains dovish, the BoE may find itself hiking rates alone and at a faster pace.

In Asia, New Zealand’s food prices have kept annual headline inflation higher than expected at 6%. This has led traders to believe that New Zealand interest rates will need to remain higher for a longer period. In Canada, the Bank of Canada’s two core inflation measures have hardly changed, remaining at 3.8%.

China’s slowing economy is casting a shadow over positive data and corporate earnings in the U.S. The Hang Seng index has dropped 1% and is down 5% for the year. Later in the day, Netflix, Tesla, and Goldman Sachs will report their earnings.

On Tuesday, markets reacted positively to better-than-expected profits from Morgan Stanley and other big banks, as well as Microsoft’s announcement of new fees for features within its office software.

Key developments that could influence markets on Wednesday include the release of British CPI and Euro zone final CPI data, as well as U.S. housing starts. Bank of England’s Dave Ramsden will also be speaking. Earnings reports from Netflix, Tesla, and Goldman Sachs are also expected.

The article was written by Tom Westbrook and edited by Muralikumar Anantharaman, adhering to the Thomson RushHourDaily Trust Principles.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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