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GBP Builds Off Lows as Sunak Seen as Likely PM

FOREX
  • Markets have largely shrugged off a dire set of PMI manufacturing and services numbers from across the UK, German and France, with conviction light ahead of the ECB rate decision on Thursday.
  • GBP is firmer ahead of the likely victory for Rishi Sunak in the race to be head of the Conservative party and new UK PM. Markets are clearly of the view he will take a steadier approach to public finances, helping relieve Gilt yields and steady UK currency markets. He is the current front-runner, with polling closing later today and markets on watch to see if Penny Mordaunt garners sufficient backing from MPs to take the race to the next stage.
  • JPY is the poorest performer headed into the European open as markets bounce after suspected intervention on Friday (and possibly overnight). Authorities rolling out now familiar language on FX vigilance, but is having little impact on the pair which continues to inch higher having recovered off 145.56 overnight lows.
  • Nearby tech levels are scant given the acute volatility Friday/Overnight, with 149.71 marking the first upside level ahead of Friday's 151.95. BoJ policy meeting Friday now the focus, with bank exp. To boost CPI forecast, cut growth view.
  • With the Fed and ECB inside their pre-meeting media blackout periods, there are few central bank speakers to note, with focus turning to the prelim October US PMI release.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
Energy BulletsCommodities
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
Energy BulletsCommodities

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