EUR/USD, GBP flows: US CPI firm though doesn't move the dial; a look the Starmer betting..
US Core CPI on the stiff side but doesn't move the dial enough for much FX impact
A quick look at the betting odds for UK PM Starmer
US CPI data overall on the upside of market with headline at 0.6% as expected, but core at 0.4% vs mkt 0.3%. In unrounded terms, core is at 0.376%. Data certainly doesn’t do any harm to the wait and see bias and the lean from the Committee to be underscoring the move away from a current easing bias. To the extent that it doesn’t hugely move the needle though, FX market little changed.
Meanwhile, looking at the latest UK politics betting odds shows where the current thinking rests.
Polymarket has odds of Starmer out as: 18%, 40%, 50%, and 80% by May 15, May31, Jun30 and Dec31 respectively. And in terms of ‘next PM’ in 2026, Andy Burnham (currently not yet an MP) at 39.3%, no next PM at 20%, followed by Angela Rayner 16% and Wes Streeting at 13%. If we discount Rayner as unlikely given her own ‘issues’ over council tax, that sort of leaves the market balanced between the odds it (superficially) doesn’t like and the ‘centrist’ candidates it minds less.
The two markets hang together because the more delayed/timetabled an exit, the more probable Burnham supporters try to mobilise his introduction. These give a bit of a benchmark but its only really when money comes in and the betting moves that you really want to take note.