Newsletter – 11th May 2017

Morning Bulletin

Yesterday

  • There was very little to report on yesterday with a distinct lack of key economic data. There was however a very positive raft of slightly more low key Eurozone data to kick the day off:
    • French Industrial Production m/m 2.0% (1.2% Exp)
    • French Trade Balance -5.4Bn (-5.9Bn Exp)
    • Italian Industrial Production m/m 0.4% (0.3% Exp)
  • Once again yesterday morning the psychological and significant 1.3000 handle proved a step too far for GBP/USD. Having rallied hard to reach a high of 1.2987 the Pound was quickly smacked back down to 1.2950 before drifting slightly lower over the day’s trading.
  • Speaking yesterday afternoon ECB President Mario Draghi acknowledged there was an increasingly solid recovery in the Eurozone but stopped short of declaring a success where inflation was concerned; suggesting further monetary accommodation was required to bring inflation back to target levels.
  • US Import Prices m/m 0.5% (0.2% Exp).
  • Incredibly punchy comments from US Fed member Rosengren yesterday evening, suggesting that not only should the central bank continue along its current path of normalisation, but they should explore its pace – with three more rate hikes possible this year.
Overnight

  • Reserve Bank of New Zealand (RBNZ) Official Cash Rate left on hold at 1.75% as expected.
  • The New Zealand Dollar has declined sharply in FX space, as in their accompanying statement the RBNZ has stuck to the same interest rate track from their previous meeting despite a recent spike in inflation and strong employment data.
  • The Kiwi Dollar is down over 1% this morning versus Sterling and the Euro.
  • According to a Quinnipiac University Poll President Donald Trump’s approval with American voters has declined over recent weeks. The poll, which was taken prior to Trump’s decision to fire FBI Director Comey, revealed that only 36% of voters approved of how Trump was handling the presidency, whilst some 58% disapproved.
  • Swiss CPI m/m 0.2% (0.2% Exp).
Today

  • Data calendar is dominated by the UK today, kicking off this morning with UK Manufacturing Production; a decline of -0.2% is expected for March.
  • Then we move on to the Bank of England’s ‘Super Thursday’ at midday. It has been dubbed so due to the release of the Bank of England’s Inflation Report alongside the BOE’s Interest rate decision and accompanying monetary policy statement.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1879 -0.18
GBP/USD 1.2939 +0.01
EUR/USD 1.0888 +0.21
AUD/USD 0.7365 +0.04

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Manufacturing Production m/m -0.2% -0.1%
09.30 GBP Goods Trade Balance -11.7Bn -12.5Bn
10.00 EUR EU Economic Forecasts
11.25 USD FOMC Member Dudley Speaks
12.00 GBP BOE Inflation Report
12.00 GBP BOE Official Bank Rate 0.25% 0.25%
12.00 GBP BOE Official Bank Rate Votes 1-0-8 1-0-8
12.00 GBP BOE Monetary Policy Statement
13.30 USD PPI m/m 0.2% -0.1%
13.30 USD Unemployment Claims 245K 238K
13.30 CAD NHPI m/m 0.2% 0.4%