Newsletter – 10th October 2017

Morning Bulletin

Yesterday

  • After 8 consecutive days of sterling losses against the euro we finally saw the pound gain some ground back yesterday.
  • The Office of National Statistics corrected an error revising up both Q1/Q2 labour costs which would result in a higher inflation reading. This renewed expectations of Bank of England tightening measures and hence we saw sterling post gains on Monday.
  • However, the pound will do well to keep up this momentum with Brexit negotiations deadlocked and PM Theresa May allegedly facing a power struggle within her own party.
  • The Bank of England’s economic projections are based on the assumption of a soft Brexit and these could change should a disorderly exit from the EU surface.
  • GBP/EUR opened at 1.1131 and traded as high as 1.1227 before closing at 1.1192. GBP/USD followed a similar course opening at 1.3093, trading up to a high of 1.3184 before dropping off slightly and closing at 1.3141.
  • There was no economic data of note yesterday with bank holidays observed in the US, Canada and Japan.
Overnight
  • Overnight we saw NAB business confidence from Australia come in with a figure of 7 whereas we saw a figure of 5 last time out.
  • GBP/AUD is currently trading 1.6925, GBP/NZD is trading 1.8643 and GBP/JPY is trading 1.48.20.
Today
  • Sterling has pushed back up to yesterdays highs against the USD this morning and has maintained yesterdays closing level.
  • At 9.30am we expect to see manufacturing production m/m data from the UK along with goods trade balance data.
  • At 1.30pm Canada will release their building permits m/m data which is expected to come in at -0.9%.
  • Following that FOMC member Kashkari will be speaking in Minneapolis at 3pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1187 -0.03
GBP/USD 1.3181 +0.31
EUR/USD 1.1780 +0.34
AUD/USD 0.7785 +0.44

 

Time (GMT) Region Data Release Forecast Previous
09:30 GBP Manufacturing Production m/m 0.2% 0.5%
09:30 GBP Goods Trade Balance -11.4B -11.6B
13:30 CAD Building Permits m/m -0.9 -3.5%
15:00 USD FOMC Member Kashkari Speaks