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  • Turkey’s Central Bank surprises markets and hikes the 1 week repo rate
  • Japan data steady but slow as USDJPY climbs to 113-handle
  • Today the focus will be on UK GDP data, particularly investment data

via Barclays

It was a quiet session yesterday given the US Thanksgiving holiday; Sterling remains well supported with our traders now seeing the early signs of some broader USD retracement. 1.2500/1.2560 should act as strong resistance for GBPUSD initially, but the November highs toward 1.2660 could be re-tested

The Central Bank of Turkey (CBT) hiked both the 1-week repo and O/N lending rates, against Barclays Research and market expectations. The CBT raised the 1-week repo rate by 50bp to 8.0% and the O/N lending rate by 25bp to 8.5%

For its rationale of the rate hike, the CBT highlighted upside risks to the inflation outlook owing to recent exchange rate movements.

Japan nationwide core CPI entered a phase of slower y/y declines in October, logging a 0.4% y/y contraction (September: -0.5%), the eighth straight month of annual declines and highlighting continued deflation and stagnant growth

USDJPY has been a significant mover this week in FX markets, and this continued overnight, with the pair pushing through its previous week high and above 113.90 at one stage. This has retraced back down below 113.00 at the time of writing

Today is likely to be a relatively quiet day with many investors taking advantage of the US holiday to have a long weekend. There is little in the way of data this morning, so the main focus will be on the second estimate of UK GDP

This provides a breakdown of the aggregate components, with headline growth expected to remain unchanged at +0.5% q/q (+2.3% y/y). In the detailed breakdown, the most interesting number is likely to be in the investment data which is expected to contract by 1%

Today’s currency rates:

GBPUSD: 1.2435

GBPEUR: 1.1730

EURUSD: 1.0600

GBPAUD: 1.6682

EURGBP: 0.8525

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