Newsletter – 10th August 2017

Morning Bulletin

Yesterday

  • The US Dollar just about managed to consolidate those gains made yesterday despite a mixed bag of data and shall we say that small disagreement with North Korea.
  • Released in the afternoon there was a fall in US Unit Labour Costs which were expected to rise 1.1%. The actual print of0.6% however will raise some further concerns around broader Inflation expectations in the US, as in theory a rise in labour costs is a leading indicator of overall consumer inflation.
  • The other key US data was Non-Farm Productivity q/q, a measure of the goods and services produced per hour by American workers.  The print of 0.9% bettered the expected 0.7% and was up massively from the 0.1% rise in the first quarter of 2017.
  • According to UK Brexit Minister David Davis, the UK has taken a significant step forward in negotiations with the EU. Mr Davis stated there was a much clearer understanding on details between the two parties, and significant convergence on key issues.
  • His confidence however was clearly not shared by markets and investors as Sterling endured a fairly average day in FX space, if not slightly negative.
  • There was a massive beat for Canadian Building Permits m/m +2.5% (-1.8% Exp).
Overnight

  • Reserve Bank of New Zealand Official Cash Rate held at1.75% as expected.
  • The Kiwi Dollar is under serious pressure this morning as the accompanying RBNZ statement was very dovish, stating that monetary policy would need to remain accommodative for a considerable period.
  • Japan Core Machinery Orders m/m -1.9% (3.6% Exp)
  • Japan PPI y/y 2.6% (2.4% Exp)
  • French Industrial Production m/m -1.1% (-0.6% Exp)
Today
  • UK data dominates this morning with the key Manufacturing Production print at 9.30am.
  • This afternoon US PPI m/m will be closely watched, as slow inflation growth remains a concern to the US Federal Reserve.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1057 -0.05
GBP/USD 1.2964 -0.28
EUR/USD 1.1725 -0.27
AUD/USD 0.7880 -0.07

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Manufacturing Production m/m 0.0% -0.2%
09.30 GBP UK Goods Trade Balance -11.0Bn -11.9Bn
13.00 GBP NIESR GDP Estimate 0.3%
13.30 CAD NHPI m/m 0.5% 0.7%
13.30 USD PPI m/m 0.1% 0.1%
13.30 USD Unemployment Claims 240K 240K
15.00 USD US Fed Member Dudley Speaks