Market volatility didn’t subside this week as FX traders went from pricing in reduced recession fears in 2023 and a slower tightening path for the Fed this year to focusing on developments in Europe. Towards the back-end of the week, all paths led to the continent as markets gained clarity on Russian gas flows once maintenance repairs had been completed on Nord Stream 1, confirmation that Italy is heading for elections before Christmas, and the ECB delivered a larger-than-signalled rate hike. The dust didn’t settle after a torrid Thursday, however, as a string of weak PMIs out of Europe and the US reinvigorated volatility in global markets.
You can read the Week Ahead in full here:
Simon Harvey, Head of FX Analysis
Jay Zhao-Murray, FX Market Analyst
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