Markets continue to grapple with rate cut expectations and now we have the added risk of rising geopolitical tensions. UK inflation data fed the rate cut narrative today as the data came in well below estimates. This will no doubt be a sigh of relief for both the UK consumer and the Bank of England as markets are pricing in rate cuts as early as May.
The biggest beneficiaries this week from the geopolitical tension in the Middle East has been both Gold and Oil. Both commodities are likely to remain supported in the near term with supply disruption concerns around likely to get worse the longer the war in Israel continues. Markets will now turn their attention toward the US PCE data release at the end of the week.