Headlines:
Markets:
- GBP leads, AUD lags on the day
- European equities lower; S&P 500 futures down 0.4%
- US 10-year yields up 0.5 bps to 4.071%
- Gold flat at $2,027.31
- WTI crude down 1.8% to $71.08
- Bitcoin down 1.8% to $42,664
The highlight of the session was the UK CPI report, which saw higher than estimated inflation figures. The details showed that services inflation remained sticky, although other components were more mixed in December. Still, the hotter numbers were enough to pump the pound up on the day.
GBP/USD rose from 1.2605 to 1.2640 on the initial reaction, before pulling higher to just under 1.2700. The pair is now trading at 1.2675, up 0.3% on the day, with traders eyeing the US retail sales data next for further clues.
Besides that, some ECB pushback on rate cuts was also in the mix but EUR/USD is mostly little changed at 1.0870 as it hovers just above its 200-day moving average of 1.0846.
The dollar tried to push its advantage in early European trading but is mostly holding an advance against the yen and commodity currencies only now. USD/JPY pushed up to a high of 147.95 before keeping around 147.70 now – still up 0.3% on the day. Meanwhile, USD/CAD is up 0.2% to 1.3520 as it seeks a break above its own 200-day moving average of 1.3480.
The antipodean currencies continue to struggle after poor China data and a more subdued risk mood on the day. AUD/USD is leading losses, down 0.4% to 0.6555 but off earlier lows of 0.6535 at least.
Treasuries are looking more tentative at the long-end with 10-year yields sitting little changed but the bond market will be one to watch as it could signal stronger moves in broader markets to the US CPI data later.