Newsletter – 10th August 2018

Morning Bulletin

Yesterday

  • The big news yesterday came in the form of a report by Business Insider which claimed the European Union and the EU 27 leaders would be prepared to offer the UK a Brexit concession. The EU are reported to be willing to let the UK remain in the single market for goods without having to allow freedom of movement, a previous red line in negotiations. However in return for such access the UK would have to replicate all EU environmental, social and customs rules in return which would likely prove unpalatable to those who voted for Brexit as it would keep the UK too closely aligned with the EU.
  • The Pound did appear to rally late morning and early afternoon following the report however any gains were limited, and in the case of the US Dollar the gains were eradicated and then some.
  • GBP/EUR Closed the day up 0.2% at 1.1120.
  • GBP/USD in contrast closed down 0.2% at 1.2850.
  • Canadian Housing Starts 206K (220K Exp)
  • Canadian NHPI m/m 0.1% (0.0% Exp)
  • US PPI m/m 0.0% (0.2% Exp)
  • US Unemployment Claims 213K (220K Exp)
  • US Final Wholesale Inventories m/m 0.1% (0.0% Exp)
Overnight

  • The US Dollar has rallied this morning in thin summer trading conditions and as global trade tensions continue to heighten. Despite the fact the US is front and centre of the global trade wars, the US economy continues to impress and then Dollar remains a safe haven currency.
  • New Zealand Business NZ Manufacturing Index 51.2 (52.8 Previous)
  • Japan Prelim GDP q/q 0.5% (0.3% Exp)
  • French Industrial Production m/m 0.6% (0.5% Exp)
  • The Reserve Bank of Australia’s Monetary Policy statement revealed the central bank expect growth in the economy to hit 3.25% in 2018 and 2019, before slightly easing to 3% in 2020. Core inflation is only expected to gradually reach 2.25% by the end of 2020, still at the lower end of the RBA’s 2-3% target range.
Today
  • This morning will be dominated by UK economic data, with GDP, Manufacturing and Trade Balance figures all set for release. With sterling under huge Brexit pressure, some positive economic news would be most welcome for the pound.
  • This afternoon will see Canadian employment data and US GDP in focus.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1138 +0.10
GBP/USD 1.2760 -0.49
EUR/USD 1.1455 -0.62
AUD/USD 0.7306 -0.92

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP GDP m/m 0.2% 0.3%
09.30 GBP Manufacturing Production m/m 0.3% 0.4%
09.30 GBP Prelim GDP q/q 0.4% 0.2%
09.30 GBP Good Trade Balance -12.0Bn -12.4Bn
13.30 CAD Employment Change 17.5K 31.8K
13.30 CAD Unemployment Rate 5.9% 6.0%
13.30 USD CPI m/m 0.2% 0.1%