Newsletter – 12th December 2017

Morning Bulletin

Yesterday

  • Sterling continued where it left off on Friday and lost value against the euro and US dollar on Monday.
  • Despite there being a lack of economic data released yesterday, GBP/EUR fell by just over a quarter of a percent and GBP/USD fell by just over a third of percent.
  • GBP/EUR opened 1.1362 and traded as high as 1.1394 before coming off to trade lower eventually closing at 1.1332.
  • GBP/USD opened at 1.3379 and traded a high of 1.3431 before closing near the low of the day at 1.3337.
  • Last night an influential US-based think tank predicted that nearly all possibly trading relationships between the UK and the EU would be less favourable than staying in the EU. (BBC)
  • They stated that the worst case scenario would be a “no deal” and this scenario would leave the UK economy 4.9% poorer by 2029.
  • A “soft Brexit” scenario involving staying within the free market would still not be as positive as staying in the EU.
  • The report says that Brexit will likely have a “mostly negative effect” on American interests in Europe.
Overnight
  • Sterling is trading lower levels against AUD, NZD and JPY this morning at 1.7648, 1.9213 and 151.32, respectively.
  • Australian HPI q/q came in weaker than expected at -0.2% vs 0.6%.
Today
  • At 9.30am we have inflation data from the UK – CPI y/y is expected to come in at 3%, PPI Input m/m is expected to come in at 1.6% and RPI y/y is expected to come in at 4.1%.
  • Following that we have Eurozone economic sentiment at 10am which is forecast to be 17.9.
  • At 1.30pm we expect PPI m/m and core PPI m/m from the US.
  • ECB President Draghi is expected to speak at 7pm at the European Cultural Day’s closing concert.
Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1328 -0.04
GBP/USD 1.3349 +0.09
EUR/USD 1.1782 +0.11
AUD/USD 0.7564 +0.51

 

Time (GMT) Region Data Release Forecast Previous
09:30 GBP CPI y/y 3.0% 3.0%
09:30 GBP PPI Input m/m 1.6% 1.0%
09:30 GBP RPI y/y 4.1% 4.0%
10:00 EUR German ZEW Economic Sentiment 17.9 18.7
13:30 USD PPI m/m 0.4% 0.4%
13:30 USD Core PPI m/m 0.2% 0.4%
19:00 EUR President Draghi speaks