Europe Roundup: Sterling slides as cooling inflation reinforces expectations of a Bank of England rate cut, European shares rise, Gold gains Oil jumps 2%-December 17th,2025

Market Roundup

• UK CPI (YoY) (Nov): 3.2%, 3.5% forecast, 3.6% previous.

• UK PPI Input (MoM) (Nov): 0.3%, 0.2% forecast, 0.0% previous.

• UK CPI (MoM) (Nov): -0.2%, 0.0% forecast, 0.4% previous.

• UK Core PPI Output (MoM) (Nov): 0.0%,   0.1% previous.

• UK Core PPI Output (YoY) (Nov): 3.5%,  3.6% previous.

• UK PPI Input (YoY) (Nov): 1.1%, 0.4% forecast, 0.8% previous.

• UK RPI (MoM) (Nov): -0.4%,  0.3% previous.

• UK PPI Output (YoY) (Nov): 3.4%, 3.6% previous.

• UK RPI (YoY) (Nov): 3.8%, 4.2% forecast, 4.3% previous.

• UK Core RPI (MoM) (Nov): -0.5%, 0.3% previous.

• UK CPI, n.s.a (Nov): 139.50, 139.80 previous.

• UK Core RPI (YoY) (Nov): 3.7%, 4.2% previous.

•  UK Core CPI (YoY) (Nov): 3.2%, 3.4% forecast, 3.4% previous.

•  UK Core CPI (MoM) (Nov): -0.2%, 0.3% previous.

•  UK PPI Output (MoM) (Nov): 0.1%, 0.1% forecast, 0.1% previous.

•  German Business Expectations (Dec): 89.7, 90.5 forecast, 90.5 previous.

• German Ifo Business Climate Index (Dec): 87.6, 88.2 forecast, 88.0 previous.

•  German Current Assessment (Dec): 85.6, 85.7 forecast, 85.6 previous.

•EU  CPI (YoY) (Nov): 2.1%, 2.2% forecast, 2.2% previous.

•EU  Core CPI (YoY) (Nov): 2.4%, 2.4% forecast, 2.4% previous.

•EU  Wages in Euro Zone (YoY) (Q3): 3.00%,  3.80% previous.

•EU  CPI (MoM) (Nov): -0.3%, -0.3% forecast, 0.2% previous.

•EU  CPI ex Tobacco (MoM) (Nov): -0.3%,  0.2% previous.

•EU  HICP ex Energy and Food (MoM) (Nov): -0.4%, -0.4% forecast, 0.2% previous.

•EU  Core CPI (MoM) (Nov): -0.5%, -0.5% forecast, -0.5% previous.

•EU  HICP ex Energy & Food (YoY) (Nov): 2.4%, 2.4% forecast, 2.4% previous.

•EU  CPI ex Tobacco (YoY) (Nov): 2.1%, — forecast, 2.1% previous.

•EU  Labor Cost Index (YoY) (Q3): 3.30%, 3.50% forecast, 3.90% previous.

•EU  CPI, n.s.a: 129.30, 129.35 forecast, 129.7 previous.

Looking Ahead Economic Data (GMT)  

• 13:30 Canada Foreign Securities Purchases (Oct): 21.84B, 31.32B previous.

• 13:30 Canada Foreign Securities Purchases by Canadians (Oct): 22.120B previous.

•15:00 US  Business Inventories (MoM) (Sep): 0.0% previous.

•15:00 US  Retail Inventories Ex Auto (Sep): 0.0% previous.

•15:30 US  Crude Oil Inventories: -2.400M  forecast, -1.812M previous.

•15:30 US  Cushing Crude Oil Inventories: 0.308M  previous.

•15:30 US  Heating Oil Stockpiles: 0.442M  previous.

Looking Ahead Events And Other Releases (GMT)  

•No Events Ahead

Currency Forecast

EUR/USD : The euro slipped lower against the dollar on Wednesday as the impact of recent hawkish remarks by board member Isabel Schnabel faded ahead of Thursday's policy meeting.Borrowing costs jumped early last week after Schnabel said the ECB's next move may be an interest rate hike, rather than a cut as some still expected.Traders priced out a rate cut in summer 2026 and positioned for a hike in early 2027, as Schnabel’s remarks aligned with data pointing to a resilient euro zone economy and expectations that increased German fiscal spending will support growth from late 2026. German business morale unexpectedly fell in December, a survey showed on Wednesday, as Europe's largest economy continues to struggle to grow.  Immediate resistance can be seen at 1.1737(38.2%fib), an upside break can trigger rise towards 1.1811(23.6%fib).On the downside, immediate support is seen at 1.1687(50%fib), a break below could take the pair towards 1.1637(61.8%fib).

GBP/USD:  Sterling dipped on Wednesday as investors added to bets that the Bank of England will cut rates on Thursday after data showed British inflation unexpectedly fell sharply in November.British consumer price inflation fell to 3.2% in November, its lowest since March, from 3.6% in October, official figures showed on Wednesday. Last month the BoE's Monetary Policy Committee voted 5-4 to keep interest rates on hold. Economists expect a December rate cut by only a narrow 5-4 margin.Of those members who opposed a cut last month, Governor Andrew Bailey looks most likely to switch votes.British inflation has been higher than in other major advanced economies, and in November the central bank forecast it would remain above its 2% target until the second quarter of 2027..  Immediate resistance can be seen at 1.3450(23.6%fib), an upside break can trigger rise towards 1.3480(Higher BB).On the downside, immediate support is seen at 1.3369(38.2%fib), a break below could take the pair towards 1.3304(50%fib).

AUD/USD: The Australian dollar slipped lower on Wednesday as the latest government budget update had little impact on the central bank’s policy outlook. The government sharply revised up its inflation forecast while continuing to expand annual spending, leaving the Reserve Bank of Australia (RBA) to manage cost pressures. Investors are betting the RBA will need to raise its 3.6% cash rate by June to rein in inflation. Australia’s November consumer price report is due on January 7, with full December and fourth-quarter data scheduled for January 28. A quarterly rise of 0.8% or more in trimmed mean inflation could prompt action at the RBA’s February 3 meeting. Immediate resistance can be seen at 0.6662(Dec 16th high), an upside break can trigger rise towards 0.6699(23.6%fib).On the downside, immediate support is seen at 0.6613(38.2%fib), a break below could take the pair towards 0.6576(SMA 20)

USD/JPY: The U.S. dollar firmed on Wednesday as traders waited for U.S. inflation data for clues on the Federal Reserve's next move. Traders are waiting for U.S. consumer price index data due on Thursday for more clues on the Fed's next move, after soft employment data earlier this week left markets and analysts unsure if the report had changed the policy outlook much. The Fed cut rates as expected last week but signalled borrowing costs are unlikely to drop further in the near term, projecting just one more rate cut in 2026. But markets are pricing in two rate cuts next year, although a January move is unlikely. Japan’s exports to the U.S. rebounded in November for the first time in eight months, rising 6.1% year-on-year, surpassing the 4.8% forecast and following October’s 3.6% gain. Imports rose 1.3% year-on-year, below the expected 2.5% increase. .Immediate resistance can be seen at 157.32(Higher BB) an upside break can trigger rise towards 155.88(38.2%fib) .On the downside, immediate support is seen at  154.50 (Daily low)  a break below could take the pair towards 154.24 (38.2%fib).

Equities Recap

European shares climbed on Wednesday, led by gains in financial and energy stocks, helping markets recover from losses seen in the previous session.

At (GMT 13:18),UK's benchmark FTSE 100 was last trading up at 1.60 percent, Germany's Dax was down by 0.17 percent, France’s CAC was last down by 0.35 percent.

Commodities Recap

Gold prices also firmed, with spot gold rising 0.4%to $4,318.99 an ounce by 1015GMT, while U.S. gold futures gained 0.4%to $4,348.10.

Oil prices rallied nearly 2% on Wednesday after U.S. President Donald Trump ordered a full blockade of all sanctioned oil tankers entering and leaving Venezuela, heightening geopolitical tensions amid ongoing concerns over global demand.

Brent crude futures were up 99 cents, or 1.7%, at $59.91 a barrel at 1302 GMT, while U.S. West Texas Intermediate crude rose 97 cents, or 1.8%, to $56.24 a barrel.