Newsletter – 10th May 2017

Morning Bulletin

Yesterday

  • The Euro continued to trade on the back-foot yesterday following the weekend’s French election result. Despite expectations that Macron’s victory would underpin Euro strength, the single currency continues to fall.
  • The Pound gained around 0.43% on the day versus the Euro, with the headline rate briefly touching 1.1900.
  • Similarly EUR/USD dropped by around 0.44%, with the rate declining to 1.0874 by the end of European trading.
  • According to Greek PM Tsipras his country is incredibly close to reaching a deal with international lenders that would help ease their mountain of debt.
  • Good jobs print out of the US in the afternoon with the JOLTS job Openings at an 8 month high for the month of March, with a print of 5.743 Million bettering the expected 5.67 Million.
  • Massive miss for Canadian Building Permits in March. Expecting a reading of 4.2%, the actual figure was a decline of -5.8%. The Canadian Dollar subsequently weakened off in the afternoon.
  • Whilst economic data was limited yesterday we did hear from a number of US Fed speakers:
    • Boston Fed President Rosengren suggested that at 4.4% the US Unemployment rate had dropped below its natural equilibrium (he estimates is approx. 4.7%) and that a drop below 4% could prompt faster interest rate hikes to avoid economy overheating.
    • Kansas City Fed President George was particularly hawkish, stating that a delay in hiking rates further would create risks to the economy and highlighted the falling employment rate as a specific reason for adjusting policy.
Overnight

  • The US Dollar is slightly on the back-foot this morning following President Trump’s controversial and unconstitutional decision to sack FBI Director James Comey. The White House announced the sacking was due to Comey’s handling of the Hillary Clinton email investigation; however the shock decision does raise concerns over the current investigation into links between Trump aides and Russia.
  • Chinese CPI y/y 1.2% (1.1% Exp)
  • Chinese PPI y/y 6.4% (6.8% Exp)
  • French Industrial Production m/m 2.0% (1.2% Exp)
Today

  • Very sparse data calendar today.
  • ECB President Draghi is due to speak at 1pm.
Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1907 +0.12
GBP/USD 1.2967 +0.24
EUR/USD 1.0890 +0.16
AUD/USD 0.7364 +0.29

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR Italian Industrial Production m/m 0.3% 1.0%
13.00 EUR ECB President Draghi Speaks
13.30 USD Import Prices m/m 0.2% -0.2%
19.00 USD Federal Budget Balance 175.0Bn -176.2Bn
22.00 NZD RBNZ Official Cash Rate 1.75% 1.75%
22.00 NZD RBNZ Rate Statement