Newsletter – 11th January 2019

Morning Bulletin

Yesterday

  • Sterling was one of the underperfomers in FX space yesterday as the prospect of Theresa May ‘s Brexit deal getting voted down next week continue to grow. Further uncertainty has been cast with the Government defeated twice in two days in Parliament, with the one amendment meaning the PM would have little to no room to manoeuvre should her deal be rejected.
  • Of course one potential outcome of Mrs May’s deal getting voted down is the very real prospect of Labour calling for a General Election in a bid to end the Parliamentary stalemate over Brexit. And unsurprisingly Labour Leader Jeremy Corbyn called for a General Election whilst speaking yesterday, stating ‘If the Government cannot pass its most important legislation, then there must be a general election at the earliest opportunity’.
  • Sterling fell to a one-week low of 1.1035 against the Euro at one stage yesterday afternoon, however it did manage to regain most of those losses to close the day around 1.1080 and at parity for the day.
  • The pound didn’t have the same rebound against the US Dollar however as it closed the day down -0.30% at 1.2750
  • According to US Fed Member James Bullard the Federal Reserve’s current stance on Monetary policy might be too hawkish and he believes they should heed market signals and stop raising interest rates.
  • Speaking yesterday US President Trump said his negotiators have had tremendous success on trade discussions with China. On the stalemate over funding for his border ball, Trump added that he had the absolute right to declare a national emergency on the border but that he was not prepared to do so as yet.
Overnight

  • Italian Industrial Production m/m -1.6% (-0.3% Exp)
  • Australia Retail Sales m/m 0.4% (0.3% Exp)
  • Japan Current Account 1.44Tn (1.10Tn Exp)
  • Japan Bank Lending y/y 2.4% (2.1% Exp)
Today
  • UK economic data firmly in focus this morning with GDP and Manufacturing data the headline figures at 9.30am.
  • Whilst this data still has to potential to shift Sterling currency pairs, ultimately economic data appears to have little impact in comparison to Brexit related news.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1040 -0.42
GBP/USD 1.2722 -0.17
EUR/USD 1.1523 +0.20
AUD/USD 0.7215 +0.42

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP GDP m/m 0.1% 0.1%
09.30 GBP Manufacturing Production m/m 0.4% -0.9%
09.30 GBP Goods Trade Balance -11.4Bn -11.9Bn
TBC GBP NIESR GDP Estimate 0.3%
13.30 USD CPI m/m -0.1% 0.0%
19.00 USD Federal Budget Balance -8.0Bn -204.9Bn