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Reddit (RDDT.N) rose 2.3% in premarket trading after brokerages raised their target prices.On September 18, Sanjay Raja of Deutsche Bank said in a report that the Bank of Englands policy decision on Thursday highlighted that there are still differences within its Monetary Policy Committee, and there is still a possibility of another interest rate cut this year. The Bank of England voted 7:2 to keep interest rates unchanged, with two dissenting members supporting a 25 basis point rate cut. The bank reiterated that it will adopt a "gradual" interest rate cut strategy in the future and that the monetary policy does not set a "preset path." Raja pointed out that this means that a rate cut in the fourth quarter of 2025 is still "entirely possible" - the Bank of England has not taken any measures to change market expectations on this issue. Deutsche Bank continues to maintain its original judgment: it expects the Bank of England to implement an interest rate cut in December and two more rate cuts in 2026.The PainMap gold maximum pain price chart shows the current futures price at approximately 3673, above the maximum pain price of 3479. However, the maximum pain price itself continues to rise, weakening downward pressure, making it more likely to maintain strong fluctuations at a high level in the short term. The intrinsic value curve is U-shaped, with a narrow bottom and a steeper right side, indicating more sensitive upward positioning. The maximum pain price has steadily risen from approximately 3335 to 3478 over the past two weeks, with funds pushing the settlement center of gravity upward, reflecting a combination of long position shifting and bearish liquidation. This represents a "statically bearish, dynamically bullish" divergence in trading. It is advisable to initially trade within the 3650-3690 range: buy low and sell high. If the price breaks above 3690 on large volume and the pain price continues to rise to ≥3500, a long position with a target of 3715/3735 can be adopted, and an exit position can be exited if it falls below 3680. Conversely, if the price falls below 3650 and the pain price weakens, a short position with a target of 3620/3600 can be adopted. Note that near-expiration options may amplify volatility and invalidate the structure due to news shocks. (The above prices are gold futures prices for October, with a spot price difference of approximately $5)British Prime Minister Starmer: Will sign a technology prosperity cooperation agreement with Trump.On September 18th, Fitch economist Jessica Hinds stated that upcoming data on inflation expectations and wage growth will be key in determining whether the Bank of England will maintain its "quarterly rate cut" cadence at its November meeting. In a report, she noted that the Bank of Englands decision to hold its key interest rate at 4% in September was a foregone conclusion, but the November decision remains uncertain. She added that the minutes released with the rate decision revealed a range of differing views on the balance of inflation risks among the seven members of the Bank of Englands Policy Committee who voted to maintain interest rates this month. Currently, our assessment is that the Bank of England will struggle to agree on another 25 basis point rate cut, but a single piece of data could easily shift the balance.

The EUR/GBP exchange rate recovers above 0.8000 in advance of Eurozone inflation and UK gross domestic product

Alina Haynes

Mar 30, 2023 16:05

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The EUR/GBP pair extended its recovery above 0.88 during the Asian trading session. Anticipating that the European Central Bank (ECB) will continue to raise interest rates to combat persistent inflation, the cross has depreciated progressively. Friday will see the publication of preliminary Eurozone Harmonized Index of Consumer Prices (HICP) and Gross Domestic Product (GDP) (Q4) figures. Prior to the publication of these figures, it is anticipated that the asset will exhibit explosive activity.

 

It is anticipated that the preliminary Eurozone HICP will decelerate significantly from 8.5% to 7.3%. While it is anticipated that the core HICP will rise to 5.7% from 5.6% in the previous release. Weak energy prices are anticipated to have a significant impact on Eurozone inflation. In light of Christine Lagarde's prediction that inflation will remain elevated for an extended period of time, the European Central Bank (ECB) is expected to continue tightening monetary policy.

 

In the interim, banking tensions are subsiding as the absence of information regarding additional collateral damage has a positive impact on the market. Chief Economist Philip Lane stated on Wednesday that ECB interest rates must rise if banking tension has no or a "relatively limited" impact.

 

Investors avidly anticipate the United Kingdom's Gross Domestic Product (GDP) data. According to the consensus, the United Kingdom's growth in the fourth quarter of CY2022 remained unchanged. It is anticipated that the annual GDP will remain unchanged at 0.4%. It is expected that the British economy will undergo a severe recession as a result of high inflation and sluggish growth.

 

The Bank of England (BoE) policymakers appear confident that inflation will moderate in the near future and that the unexpected rise in February's inflation was a one-time anomaly; however, the absence of evidence raises doubts. If inflation persists, BoE Governor Andrew Bailey stated that additional rate increases would be announced. In contrast, Bank of America (BoA) analysts anticipate that the Bank of England (BoE) will not increase rates and will maintain current levels until 2024.


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