Newsletter – 10th October 2018

Morning Bulletin

Yesterday

  • Economic data was thin on the ground again yesterday and that was reflected in largely benign trading during the morning session.
  • Sterling was once again one of the better performers in FX space as the Pound continues to be buoyed by prospects of progress between the UK and the EU and hopes that terms of the divorce deal could be finalised this month or next.
  • GBP/EUR rallied to a high of 1.1448 yesterday afternoon, that represented the highest level since Mid-June and a rise of 0.5% on the day.
  • GBP/USD managed to climb to a near two-week high of 1.3150, up 0.45% on the day.
  • More stories continued to emanate about Brexit over the course of yesterday afternoon, late in the day and citing unidentified diplomats, a Dow Jones report suggested that the UK and EU could agree Brexit divorce terms as soon as Monday.
  • Shortly after this report UK Brexit Secretary Dominic Raab said he expected progress in negotiations to be made at a summit of European Union leaders next week, describing the meeting as an important milestone in the UK’s process of leaving the bloc.
Overnight

  • The Pound has continued to strengthen overnight and this morning as more reports and stories suggest the UK and EU are close to agreeing terms on the Divorce deal.
  • Late last night ITV news reported that the two parties had made progress on the Irish Border backstop, an issue that had threatened to undo talks up to this point.
  • Speaking overnight US Fed member Williams said gradual rate hikes still appear appropriate as at present there are no signs of greater inflationary pressures on the horizon. Williams also said he expected strong economic growth of 3% this year and 2.5% in 2019.
  • Japan Core Machinery Orders m/m 6.8% (-3.9% Exp)
  • French Industrial Production m/m 0.3% (0.1% Exp)
Today
  • Raft of UK data due this morning from 9.30am with GDP and Manufacturing Production the headline figures.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1452 +0.17
GBP/USD 1.3157 +0.11
EUR/USD 1.1489 -0.01
AUD/USD 0.7104 +0.04

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP GDP m/m 0.1% 0.3%
09.30 GBP Manufacturing Production m/m 0.1% -0.2%
09.30 GBP Goods Trade Balance -10.9Bn -10.0Bn
09.30 GBP Industrial Production m/m 0.1% 0.1%
10.00 GBP BOE Member Haldane Speaks
TBC GBP NIESR GDP Estimate 0.6%
13.30 USD PPI m/m 0.2% -0.1%
15.00 USD Final Wholesale Inventories m/m 0.8% 0.8%