Newsletter – 11th February 2019

Morning Bulletin

Friday

  • Friday was a slow day in terms of economic data.
  • The Pound traded virtually flat on the day versus both the US Dollar and the Euro but did sustain marginal losses against the majority of its other currency counterparts.
  • According to Sky sources EU Council President Donald Tusk has told Theresa May that the Labour party’s Brexit plan offers a ‘promising way out’ of the current stalemate.
  • Canadian employment data was in focus Friday afternoon and it was pretty mixed. Whilst the overall unemployment rate edged higher to 5.8% in January (5.7% Expected), the number of net new jobs created rocketed to and impressive 66,800, far exceeding the 6,500 expected.
  • The Canadian Dollar rallied in FX space following the data:
    • USD/CAD dropped from 1.3320 down to 1.3229
    • GBP/CAD declined from 1.7270 to close in the Mid 1.7100’s
  • According the the Financial Times talks between the UK and Japan on a trade deal Post-Brexit have stalled, with little progress having been made over the past 18 months. The UK would of course revert to WTO trading terms with the likes of Japan at the end of March should a Brexit deal with the EU not be ratified.
  • Tweeting Friday afternoon EU negotiator Barnier said he was looking forward to meeting with Stephen Barclay (UK Brexit Sec) to hear his vision on the UK’s way through, but reiterated once more that the withdrawal agreement could not be reopened, but that the EU was open to reworking the political declaration.
Overnight

  • UK PM Theresa May appears to have ruled out any customs union with the European Union post-Brexit, effectively quashing Labour’s main demand in order to win the support of their MP’s on Mrs May’s Brexit Deal. However in her written response, Mrs May has left the door open to further discussions with Labour leader Jeremy Corbyn.
  • According to a BMG poll conducted for the Independent, 53% of voters would support the postponing of the UK’s exit from the European Union in order to facilitate further talks or even a second referendum. 33% of those polled were in favour of leaving with no deal regardless of its impact on the economy, whilst a further 14% said they didn’t know.
  • Britain and Switzerland have an agreement in place to be signed imminently that would allow preferential trading terms after Brexit.
  • In the US, talks between Democrats and Republicans have once again collapsed with regards to funding President Trump’s Border wall. Lawmakers will now be fighting once again to avert another US Government shutdown.
  • According to an academic study Germany stands to take the biggest hit should the UK crash out of the European Union with no deal. The study suggests a hard Brexit would threaten 100,000 German jobs with workers in the car industry the most at risk.
  • Swiss CPI m/m -0.3% (-0.2% Exp)
Today
  • Raft of UK economic data set for release this morning.
  • All figures due at 9.30am including GDP, Manufacturing Production and Business Investment.
  • Worth noting it is a Japanese bank holiday today.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1420 -0.15
GBP/USD 1.2927 -0.08
EUR/USD 1.1315 -0.04
AUD/USD 0.7089 +0.07

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP GDP m/m 0.0% 0.2%
09.30 GBP Manufacturing Production m/m 0.2% -0.3%
09.30 GBP Prelim GDP q/q 0.3% 0.6%
09.30 GBP Prelim Business Investment q/q -1.3% -1.1%
09.30 GBP Goods Trade Balance -12.0Bn -12.0Bn
TBC GBP NIESR GDP Estimate 0.3%
16.15 USD Fed Member Bowman Speaks