Markets Report - 13 November 2023

A daily breakdown of the markets for the 13th November 2023, provided to you by Sterlex.

🇪🇺💶Central bank will not prejudge further movements in the policy rate. Will ensure policy remains sufficiently restrictive for as long as necessary. Sees general disinflationary process continuing over the medium-term. Will be in a better position to reassess inflation outlook and required action in December meeting. There are signs that labour market is beginning to weaken. Forward guidance is out of fashion. It is likely that euro area economy will remain subdued in the near-term. European Central Bank (ECB) Vice President Luis de Guindos said on Monday, “central bank will not prejudge further movements in the policy rate.” Expect a temporary rebound in inflation in the coming months.

🇬🇧💷On the Pound Sterling front, fears of an excessive slowdown in the UK economy have escalated as business investment fell significantly in Q3 due to higher interest rates by the Bank of England (BoE) and weak demand in domestic and overseas markets.

Meanwhile, investors await the UK employment data, which will be published at 07:00 GMT on Tuesday. As per the consensus, the Unemployment Rate in the three months ending September is seen unchanged at 4.2%. The Claimant Count Change for October rose by 15K, lower than 20.4K reading from September.

In addition to the UK employment, wage growth data will be keenly watched. Investors should note that stubborn wage growth in the UK economy is a major contributor to persistent price pressures.

🇺🇸 🏦Last week’s strong rebound in the index seems to have met decent resistance around the 106.00 neighbourhood for the time being. Looking at the US docket, markets’ attention is expected to be on the publication of US inflation figures gauged by the CPI and Producer Prices on Tuesday and Wednesday, respectively, as well as Retail Sales. Furthermore, the bounce in the dollar was underpinned by the equally firm move higher in US yields, particularly on the short end of the curve, in response to increasing speculation of further tightening by the Federal Reserve. On the latter, recent Fedspeak appears to bolster the tighter-for-longer stance from the Fed, a vision that comes in stark contrast to investors’ perception that the central bank is done hiking rates.