USD’s rally takes a pause, while riskier assets are modestly rising.
UK CPI goes up by 2.7% in August
In August, UK consumer prices jumped by 2.7% in contrast with 2017, as the Office for National Statistics uncovered on Wednesday.
It turned out above hopes for a jump of 2.4% and also in contrast with the 2.5% ascend observed in July.
Core CPI, without alcohol, energy, tobacco, and food rallied at a seasonally updated rate of 2.1% in August, in contrast with estimates for 1.8% as well as the 1.9% tempo observed in July.
Without this outcome and the minor uptick observed n July, UK inflation has been steadily going down since it reached 3.1% last November.
Britain’s key financial institution held interest rates intact the previous week and stressed its hopes for inflation to speed down to the 2% objective at a conventional horizon.
However, Britain’s key financial institution the UK central bank was quite firm that its projections appeared to be conditioned on the hopes for a smooth tweaks to the average of an array of probable outcomes for Britain’s eventual trading relationship with the EU.
Brexit negotiations are braced for resuming over the coming week. EU leaders hope that the first of three summits are going to settle an agreement for departing the United Kingdom for the next two months.
On Thursday, EU statesmen are going to get an update on negotiations in Austria and also determine whether to launch a special summit on Brexit in November or not. Currently, they don’t expect to come to a compromise at their regular meeting scheduled for October 18-19.
The timing of the gathering is in line with EU Brexit negotiator Michel Barnier's thought that an exit agreement could be struck in 6-8 weeks if talks are quite realistic in their demands.
The vast majority of market experts don’t expect the Bank of England to have rates lifted again until after the UK has left the European bloc.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The market optimism waned amid stricter restrictions to control rising coronavirus infections. S&P 500 and Nasdaq dropped from the all-time highs, while the USD jumped higher.
S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.
PMI reports from the EU, the UK, and the USA will be released during the day!