Last week the US CPI print was the spark that moved the risk assets lower. Year on year inflation dropped 0.1% but did beat expectations thus if the Fed continues to follow the data, then it leaves it little room other than to continue their tightening cycle. The DXY gained 0,5% to close at 113.298.

Euro ended the week mixed losing ground vs the USD and GBP but gaining against other majors. The euro seems to have moved into a period of consolidation and eyes will be where it looks to break next.

GBP is becoming harder and harder to trade as political and budgetary developments seem to break hour by hours. Chancellor Kwarteng was sacked and replaced by the UK PM as the UK government looks to control the damage of the mini budget. The GBP actually managed a positive week, but any political news leaves the currency ion a very precarious position.

Commodity currencies had a challenging week. USD rallied and oil collapsed. NZD and CAD both retreated around 1% but AUD was the weeks worst performer losing 2.6% on the week.

Oil prices lost much of the previous week’s gains continuing its recent volatility path. WTI closed down 8% at $85.61.

The week ahead is light on data but the unfolding situation in UK politics is where most of the spotlight will be shone. With the Fed remaining hawkish this could push the USD higher and risk assets could come under further pressure.

In terms of data, we have earnings from the UK along with inflation numbers from Norway, the US, Japan and Switzerland.