Market Analysis

The Pound is in high demand during early Wednesday trading

 

FOREX

The Pound is in high demand during early Wednesday trading, following the release of UK inflation numbers which rose to 4.2% for October. This number exceeded expectations and represents a substantial uptick from the 3.1% registered in September, increasing the pressure on the Bank of England to start hiking rates, especially after employment data published on Tuesday showed signs of strength in the labour market.  As a result, sterling reached a fresh high for the year against the euro, with the single currency likely to remain under pressure as the differential in expectations between the ECB and BoE over the tightening of monetary policy keeps growing with the BoE likely to start hiking rates soon.

Ricardo Evangelista – Senior analyst, ActivTrades

 

Source: ActivTrader

 

 

OIL

WTI dropped during early Wednesday trading, following the release of a report that showed lower than expected gasoline stocks in the US, a scenario that can potentially force authorities in Washington to tap into emergency oil reserves to halt the rise in fuel costs. Such a scenario, entailing a sudden increase in supply, would be very likely to cause a drop in oil prices and that seems to be what the markets are discounting this morning.

Ricardo Evangelista – Senior analyst, ActivTrades

 

Source: ActivTrader

 

 

EUROPEAN SHARES 

European shares fluctuated on Wednesday, with gains in Milan offset by losses in London, as investors chose to take some profit following the recent record highs and ahead of key data today. Even if traders will keep one eye on US macro data, with crude oil inventories and building permits due later today, their main focus is likely to be on Europe with the highly awaited inflation report as well as another speech from Christine Lagarde who may provide more clues on policy. Meanwhile, the situation remains “risk-on” as support levels continue to be defended by buyers, which keeps the prospect of new highs alive, even if market volatility is expected to rise through the day.

Pierre Veyret– Technical analyst, ActivTrades

 

Source: ActivTrader

 

 

 

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