Newsletter – 1 February 2017

Morning Bulletin


  • Turned out to be a solid day for Sterling despite a relatively sharp sell-off in the morning. Sterling was on the back-foot early on following a very disappointing net lending to individuals print for December, down to 4.8Bn against an expected 5.3Bn.
  • Despite the morning blip, the Pound closed strongly and was actually up on the day versus all of its major counterparts aside from the Euro. Having briefly dropped to an 8 day low of 1.2412 against the US Dollar by midday, the rate rebounded to close European trading at 1.2570.
  • The Euro was arguably the best performer on the day buoyed by encouraging Eurozone economic data:
    • CPI Flash Estimate 1.8% (1.5% Exp)
    • Flash GDP q/q 0.5% (0.4% Exp)
  • Most notably the Euro closed up 0.88% against the US Dollar at a rate of 1.0785. Despite the much better than expected inflation print, ECB member Villeroy sought to ease savers fears repeating that any concerns over this rising inflation were greatly exaggerated.
  • The US Dollar was one of yesterday’s worst performers as ‘The Donald’s’ policies continue to shake global markets and people alike. His most recent attack was on the giant and lucrative US drugmakers. The Dollar depreciated by some 1.5% versus the Yen, with EUR/USD briefly hitting a 2017 high of 1.0812.
  • BREXIT WATCH: According to a Times Report UK PM May would like to trigger Article 50 at an EU Leaders Summit on the 9th March. MP’s are expected to vote on the Brexit Bill this evening.


  • New Zealand Employment Change q/q 0.8% as expected
  • New Zealand Unemployment Rate 5.2% (4.8% Exp)
  • Chinese Manufacturing PMI 51.3 (51.2 Exp)


  • The only key release this morning will be UK Manufacturing PMI due at 9.30am. The afternoon and evening will be dominated by action from State side, including employment and manufacturing data and then of course the main event which will be the US Federal Reserve’s FOMC rate decision and accompanying statement. The Fed is widely expected to keep interest rate on hold at 0.75%.
Current at time of distribution

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1651 +0.02
GBP/USD 1.2578 +0.02
EUR/USD 1.0793 -0.04
AUD/USD 0.7575 -0.11


Current at time of distribution
Time (GMT) Region Data Release Forecast Previous
09.30 GBP Manufacturing PMI 55.9 56.1
TBC EUR EU Economic Forecasts
12.00 GBP Prime Minister’s Questions
13.15 USD ADP Non-Farm Employment Change 165K 153K
14.30 EUR EU’s Moscovici Speaks
15.00 USD ISM Manufacturing PMI 55.0 54.7
19.00 USD US Federal Funds Rates <0.75% <0.75%
19.00 USD US Fed FOMC Statement