Daily Alert – Wednesday 20th October 2021: UK inflation well above mandated 2 percent

Mark NugentDaily Alert, Oct 2021

Daily Alert – Wednesday 20th October 2021: UK inflation well above mandated 2 percent

Yesterday was a solidly risk-on day. I went long on Japan225. Further, the weak JPY and rising commodity currencies tempted me into AUDJPY long. Sentiment is undefined at this early hour and neither trade has really taken off, so far.

UK inflation missed expectation this morning (3.1 percent actual vs 3.2 percent expectation) but is well above the Bank of England’s inflation mandate which sits at 2 percent. Hence Governor Bailey’s intention to raise interest rates. I am not sure how that’s going to sort out the global supply chain issues driving inflation but what do I know?

It’s quiet on the calendar for the rest of the day and tomorrow is empty. It is likely we will see some more distinct sentiment as the day winds on and, as always, I will look at potential trades this evening.

We’ll be back in the morning.

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