Newsletter – 10th April 2018

Morning Bulletin

Yesterday

  • There was a massive beat on expectations for UK Halifax House Price Index data yesterday morning with house prices growing 1.5% in March; growth of just 0.1% had been forecast.
  • Investor Confidence within the Eurozone weakened further in April according to the Sentix survey. The measure fell to19.6 in April, the third decline in a row and down on the expected reading of 21.2. Fears over a potential trade war contributed to the decline.
  • Sterling was at times the main beneficiary of yesterday’s sparse data calendar, particularly up until Midday. The Pound was pushing the significant 1.1500 level versus the Euro, but once again failed to breach it and subsequently retreated back into the Mid 1.1400’s during the afternoon.
  • Sterling was also pushing a near 2-week high versus the US Dollar, trading to a day’s high of 1.4164, before closing the day around 1.4130.
  • Speaking yesterday afternoon ECB Vice President Constancio suggested the ECB needed to remain cautious and avoid premature tightening of its ultra-loose monetary policy for fear of derailing the rebound in Eurozone inflation. Weak inflationary growth remains a problem for the Central Bank.
  • Echoing the comments of his colleague, ECB Chief economist Praet also pointed to subdued inflationary developments as a core reason for continuing with an ample degree of monetary stimulus.
  • Commenting on US trade matters yesterday, White House advisor Kudlow said:
    • He does not know if the US will impose tariffs on China or whether the dispute could be settled via negotiations, but that he remains an optimist.
    • Good progress is being made on NAFTA.
Overnight

  • New Zealand NZIER Business Confidence -11 (-12 Previous)
  • Australia NAB Business Confidence 7 (9 Previous)
  • French Industrial Production m/m 1.2% (1.5% Exp)
  • UK BRC Retail Sales Monitor y/y 1.4% (0.6% Previous)
  • Speaking overnight US Fed Member Kaplan said he expected another two rate hikes this year, and that it was too early to judge the effect that trade talks are having on the economy.
Today

  • Very quiet on the data front today.
  • US Producer Price Index the only higher impact release due at 1.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1484 +0.17
GBP/USD 1.4154 +0.19
EUR/USD 1.2325 +0.04
AUD/USD 0.7727 +0.42

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR Italian Industrial Production m/m 1.0% -1.9%
10.30 GBP BOE Member Haldane Speaks
11.00 USD NFIB Small Business Index 107.0 107.6
13.15 CAD Housing Starts 219K 230K
13.30 CAD Building Permits m/m 5.6%
13.30 USD PPI m/m 0.1% 0.2%
15.00 USD Final Wholesale Inventories m/m 0.8% 1.1%