XM अमेरिका के निवासियों को अपनी सेवाएँ मुहैया नहीं करता है।

Will UK inflation corroborate a June BoE rate cut? - Preview



  • Investors assign 60% chance for a June rate cut by the BoE

  • UK CPI data to reveal whether inflation hit the BoE’s target

  • But PMIs imply some upside risks

  • The data is scheduled for Wednesday at 06:00 GMT

 

BoE appears more dovish than expected

While a few weeks ago investors were convinced that the European Central Bank (ECB) may be the first major central bank to start lowering interest rates, the latest developments seem to have somewhat mixed up the picture instead of clearing it. Yes, the ECB is still largely anticipated to deliver its first 25bps rate cut in June, but now there is a decent 60% probability for the Bank of England to do so as well.

Market participants have been ramping up their rate-cut bets after the central bank appeared more dovish than expected at its latest gathering, leaving interest rates unchanged but with two members voting for a 25bps reduction. In the statement accompanying the decision there was an addition saying that they will consider forthcoming data releases and how these inform the assessment that the risks from inflation persistence are receding. Combined with the downward revisions in the inflation projections, this suggested that officials believe inflation will continue easing towards their objective.

Did inflation hit 2% in April?

However, just the day after the decision, data revealed that the UK economy rebounded more than expected in Q1, after slipping into recession during the second half of 2023, while the following week, the employment report pointed to hotter-than-expected wage growth in March, raising some concerns on whether inflation could hit the BoE’s 2% target any time soon.

With that in mind, next week’s CPI numbers for April may attract special attention, especially with the BoE itself expecting the data to show that the headline CPI has already fallen near its objective of 2% in April, largely due to a drop in regulated energy prices. That said, the Bank also forecasted that inflation would rebound again later in 2024, although it revised down its projections from last time.

PMIs point to some upside risks

According to the PMIs for the month, prices charged inflation across the service sector, which accounts for around 80% of total UK GDP, eased to a three-year low, suggesting that indeed inflation may have continued slowing at a fast pace. Nonetheless, the manufacturing survey revealed that cost pressures are growing and feeding through to higher selling prices at the factory gate, which means that goods’ prices may not be cooling as fast as prices in the service sector.

This implies that there is the risk of the headline rate not falling close enough to the BoE’s target and indeed, in the PMI reports it was noted that the overall output charge inflation eased slightly since March. Thus, if the headline rate does not fall to 2% as analysts are also projecting, and the core CPI proves to be somewhat stickier than expected, the pound may gain ground as the probability for a rate cut in June could decline somewhat.

 

PMIs and retail sales also in focus

Even if UK inflation drops to 2% as projected, a set of better-than-expected PMIs for May on Thursday, could still allow a question mark hanging over a June rate cut. The UK economy grew more than anticipated in Q1, and should the PMI suggest that it continues to perform well, investors may see less need for a rate reduction in June and thereby erase a portion of Wednesday’s CPI losses. After all, ahead of the June gathering, traders will have to examine and digest another CPI report. Friday’s retail sales may also be monitored for gauging the health of the economy.

Will pound/dollar break above 1.2800 soon?

From a technical standpoint, pound/dollar has been in a recovery mode since April 22. However, for the medium-term outlook to be considered overly bullish, the pair may need to overcome the key barrier of 1.2800, which stopped the bulls from drifting north on multiple occasions in the recent past.

Such a break may encourage advances towards the high of July 27 at 1.2995, the break of which could curry extensions towards the high of July 14 at around 1.3145. For the picture to darken, a drop below the 1.2500 zone may be needed.

संबंधित परिसंपत्तियाँ


ताजातरीन समाचार

BoJ to stand pat; Yen under pressure – Preview

U

Weekly Technical Outlook – EURUSD, USDJPY, EURGBP

U
E
E

Week Ahead – A decisive week for USD with NFP and more; BoJ meets

U
E
A
G
U

BoC policy meeting: a rate cut and clues for the next one – Preview

U

Week Ahead – BoC to speed up rate cuts; flash PMIs eyed for growth clues

U
E
A
G
U

अस्वीकरण: XM Group के सत्व केवल निष्पादन वाली सेवा और हमारी ऑनलाइन व्यापार सुविधा में पहुँच प्रदान करते हैं, ताकि व्यक्ति वेबसाइट पर या उसके जरिए उपलब्ध सामग्री को देख सके और/या उसका उपयोग कर सके। इसका प्रयोजन इसे बदलना या विस्तार देना नहीं है, न ही वह इसे बदलता या विस्तार देता है। इस तरह की पहुँच हमेशा ही निम्नलिखित के अधीन रहेगी: (1) नियम और शर्तें; (2) जोखिम चेतावनियाँ; और (3) पूर्ण अस्वीकरण। इसलिए ऐसी जानकारी सामान्य सूचना से अधिक कुछ भी नहीं है। विशेष रूप से, कृपया इससे अवगत रहें कि हमारी ऑनलाइन व्यापार सुविधा की सामग्रियाँ न तो किसी चीज का अनुरोध करती हैं, न ही वित्तीय बाजारों में प्रवेश करने की पेशकश ही करती हैं। किसी भी वित्तीय बाजार में व्यापार करने के साथ आपकी पूँजी को उल्लेखनीय जोखिम है।

हमारी ऑनलाइन व्यापार सुविधा में प्रकाशित सभी सामग्रियाँ शैक्षणिक/सूचनात्मक प्रयोजनों मात्र के लिए हैं, और इनमें वित्तीय, निवेश टैक्स या व्यापार सलाह और सुझाव नहीं हैं - न ही ऐसा समझना चाहिए कि इनमें ये सब हैं; न ही इनमें हमारी व्यापार कीमतों का अभिलेख है; न ही इनमें किसी वित्तीय उपकरण में लेन-देन करने का निमंत्रण या अनुरोध है; न ही ये आपको अवांछित वित्तयी प्रोमोशन पेश करती हैं।

इस वेबसाइट में मौजूद कोई भी तृतीय पक्षीय सामग्री, तथा XM द्वारा तैयार की गई सामग्रियाँ, जैसे: अभिप्राय, समाचार, अनुसंधान, विश्लेषण, कीमतें और अन्य सूचनाएँ या तृतीय पक्षों की साइटों के लिंक, "जैसा-है-वैसा" के आधार पर बाजार के बारे में सामान्य टिप्पणी के रूप में उपलब्ध कराई गई हैं, और वे निवेश हेतु सलाह नहीं हैं। जिस हद तक कीसी सामग्री को निवेश अनुसंधान मान लिया जाता है, उस हद तक आपको ध्यान में रखना होगा और इसे स्वीकार करना होगा कि वह सामग्री इस उद्देश्य से और निवेश अनुसंधान की स्वतंत्रता को बढ़ावा देने के लिए कानूनी आवश्यकताओं के मुताबिक, तैयार नहीं की गई है, और इसलिए उसे प्रासंगिक कानूनों और विनियमों के तहत विपणन संप्रेषण माना जाएगा। कृपया सुनिश्चित करें कि आपने गैर-आश्रित निवेश के बारे में हमारी सूचना को पढ़ और समझ लिया है। पीछे दी गई जानकारी के बारे में अनुसंधान और जोखिम चेतावनी यहाँ उपलब्ध है।

जोखिम की चेतावनी: आपकी पूँजी जोखिम में है। लीवरेज वाले उत्पाद सबके उपयुक्त नहीं होते हैं। कृपया हमारे जोखिम खुलासे पर विचार करें।