Newsletter – 11th July 2018

Morning Bulletin

Yesterday

  • UK data dominated yesterday morning and on balance was slightly disappointing.
  • The main cause of disappointment was the weaker than expected Manufacturing Production print during May, with month on month growth of just 0.4% against a forecasted 1.0%.
  • Meanwhile UK GDP data was released in a new format for the first time yesterday, with a monthly indicator alongside a rolling three-month figure. The m/m print showed the economy grew by 0.3% during May with the Royal Wedding and warm weather boosting the service sector in particular. The rolling three-month indicator showed the economy had grown by just 0.2% in the three-months up to May when compared to the previous three-month period.
  • The UK’s Goods Trade Balance edged slightly wider in May, with Imports outstripping exports to the tune of 12.4Bn, a figure of 11.9Bn had been expected.
  • Perhaps unsurprisingly the data didn’t cause too much of on an impact on the Pound in FX space, with the figures proving neither overly exciting nor concerning for the UK’s outlook.
  • German investor confidence plummeted to its lowest level since 2012 yesterday with the ZEW Economic Sentiment reading of -24.7 (-17.9 Exp). Investors are concerned about political uncertainty and the threat of a trade war with the United States.
  • Ever the shrinking violet, US President Donald Trump decided to throw his own two cents into the current chaos surrounding the UK Government, stating that the UK is in turmoil and that it was up to the people of the UK to decide whether or not Theresa May should remain as PM. He also added that Boris was a friend of his and that he gets along very well with Mrs May.
  • Canadian Building Permits m/m 4.7% (0.1% Exp)
  • US JOLTS Job Openings 6.64M (6.88M Exp)
Overnight

  • There were surprising comments from the EU’s Chief Brexit Negotiator Michel Barnier yesterday when he said 80% of the Brexit deal has been agreed and that he was determined to get the deal done on the remaining 20%. Barnier was speaking at an event in New York.
  • Echoing that more positive rhetoric German Chancellor Angela Merkel said she welcomed Theresa May’s new Brexit proposals and that progress had been made in negotiations.
  • Japan PPI y/y 2.8% as expected
  • Japan Core Machinery Orders m/m -3.7% (-5.2% Exp)
  • Australia Westpac Consumer Sentiment 3.9% (0.3% Prior)
Today
  • The Bank of Canada’s monetary policy meeting will be the focus of today’s trading, with the BOC expected to raise interest rates by 0.25%.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1313 +0.05
GBP/USD 1.3275 +0.01
EUR/USD 1.1732 -0.10
AUD/USD 0.7417 -0.55

 

Time (GMT) Region Data Release Forecast Previous
TBC GBP NIESR GDP Estimate 0.2%
13.30 USD PPI m/m 0.2% 0.5%
15.00 CAD Bank of Canada Overnight Rate 1.50% 1.25%
15.00 CAD BOC Rate Statement
15.00 CAD BOC Monetary Policy Report
15.00 USD Final Wholesale Inventories m/m 0.5% 0.5%
16.15 CAD BOC Press Conference
17.30 USD Fed Member Bostic Speaks