Newsletter – 12th February 2018

Morning Bulletin


  • Sterling dropped sharply lower Friday morning, following a combination of disappointing data and comments from EU Brexit Minister Barnier. Following a week of talks with the UK, Mr Barnier said that a transition period was not a given when the UK formally withdraws from the EU in 2019, and that there are continuing disagreements between the two parties including:
    • The UK’s refusal to guarantee permanent rights to EU nationals who come to live and work in the UK during the transition period.
    • The right of the UK to object to new EU rules and laws during the period.
    • Whether the UK could continue to participate in new justice and home affairs policies during the transition period.
  • The aforementioned UK data was slightly mixed:
    • Manufacturing Production m/m (Dec) 0.3% as expected
    • Goods Trade Balance (Dec) -13.6Bn (-11.6Bn Exp)
    • Construction Output m/m (Dec) 1.6% (0.0% Exp)
    • Industrial Production m/m (Dec)  -1.3% (-0.9% Exp)
  • Having been trading around 1.3980, the Pound dropped to 1.3820 against the US Dollar by Midday before hitting a 3.5 week low of 1.3765 later in the afternoon.
  • Similarly GBP/EUR plummeted from 1.1389 to 1.1294, before trading as low as 1.1257 in the afternoon.
  • Canadian economic data headlined Friday afternoon and it was weak, with the number of those employed down some –88,000 in January against an expected increase of 10,300. Unsurprisingly then we also saw the overall Unemployment Rate rise to 5.9% from 5.8%, that was much worse than the expected drop to 5.7%.
  • Despite this weaker than expected data, whilst the Canadian Dollar did lose some ground, it didn’t depreciate all that much in FX space.
Over The Weekend

  • Swiss CPI m/m -0.1% as expected
  • Japan PM Abe plans to reward Bank of Japan Governor Kuroda with a second five-year term, tasked with bringing the current low levels of inflation back towards their 2% target.
  • Speaking over the weekend Bank of England Chief Economist Andy Haldane said the BOE was in no rush to raise interest rates, but some ‘further tightening of policy might be needed over the period ahead’. He cited inflationary developments being ahead of the bank’s targets as a core reason for hiking.
  • IMF Chief Christina Lagarde said she welcomes last week’s drop in global stock markets and that it was not a source of major concern. Lagarde said the fall was a ‘welcome correction’.

  • There is no data set for release today.
  • Worth noting it is a Japanese Bank Holiday.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1291 +0.05
GBP/USD 1.3867 +0.31
EUR/USD 1.2276 +0.22
AUD/USD 0.7820 +0.11


Time (GMT) Region Data Release Forecast Previous
09.50 GBP BOE Member Vileghe Speaks
16.30 GBP BOE Member McCafferty Speaks
19.00 USD Federal Budget Balance 50.2Bn -23.2Bn