Market Commentary: Tuesday 17th December

GBP rallies this morning as 'cost-push' inflationary pressures emerge. UK wage growth surged 5.2% y/y in October, above September’s 4.3% and well ahead of forecasts for 4.6%. Wage growth was 5.2%, up from 4.8% prior and against a forecast of 5.0%. Employment rose a huge 173k in October following a 220k rise in September.

Overnight, equity markets were mixed. China’s top leadership agreed last week to lift the budget deficit to 4% of GDP next year, its highest on record, while maintaining an economic growth target of around 5%. In the US, President-elect Donald Trump's transition team is recommending significant changes, including scrapping support for electric vehicles (EVs) and boosting measures to block cars, components, and battery materials from China.

As for the day ahead, the data front is quiet, but in France, we will hear from new Prime Minister Bayrou, who will answer questions to the government in parliament as his ministers have not yet been appointed.

Market-wise, Bitcoin rose 0.3% to $106,382.95, but Ether fell 1.2% to $3,999.04. US 10-year Treasuries were little changed at 4.40%. West Texas Intermediate crude rose 0.2% to $70.85 a barrel, and spot gold fell 0.2% to $2,648.68 an ounce.

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