Unexpected rebound in UK inflation reverses GBP sell-off | MarketTalk: What’s up today? | Swissquote

Show notes

Yesterday was just another day where another policymaker pushed back on the exaggerated rate cut expectations. Federal Reserve’s (Fed) Christopher Waller said he sees ‘no reason to move as quicky or cut as rapidly as in the past’, and as is suggested by the market pricing. So that was it. Another enlightening moment went down the market’s throat in the form of a selloff in both equities and bonds and a rebound in the US dollar.
Many bankers and influential figures are wining, dining and speaking in the World Economic Forum in Davos this week, which doesn’t only offer snowy and a beautiful scenery this January, but it also serves as a platform to many policymakers to bring the market back to reason. Expect more comments of this hawkish kind during this week. It turns out that one of the most popular topics of this year’s WEF is rising inflationary risks due to the heating tensions in the Red Sea which disrupt the global trade roads and explode the shipping costs.
In the market, the EURUSD slipped into the bearish consolidation zone, the GBPUSD rebounded after a stronger-than-expected inflation report weakened the Bank of England (BoE) doves’ hands. The USDJPY is preparing to test the 148 level, while crude oil remains under pressure despite Red Sea tensions.
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