Newsletter – 12th July 2018

Morning Bulletin


  • The Bank of Canada was the focus of yesterday’s trading and as expected they opted to hike rates by 0.25%, taking their overnight rate up to 1.50%. That was their second hike of 2018 as the BOC appear unperturbed by concerns of a trade war with the United States. In their accompanying statement the BOC relayed the same message as before, that rates would need to rise further albeit at a gradual pace.
  • The Canadian Dollar had a brief rally in FX space but that proved short lived with those gains eradicated pretty quickly afterwards.
  • The Pound tumbled just ahead of the BOC meeting, following news that Eurosceptic Tory MP’s, led by Jacob Rees-Mogg, had tabled four amendments to alter Theresa May’s trade bill that had been agreed at chequers which could scupper the PM’s plans and once again lead to the real possibility of Britain exiting the EU with no deal.
  • There were two pieces of US data released yesterday afternoon which were mixed:
    • Producer Price Index m/m 0.3% (0.2% Exp)
    • Final Wholesale Inventories m/m 0.6% (0.5% Exp)
  • Speaking yesterday afternoon US Fed Member Evans said the fundamentals and overall outlook for the US economy was quite strong, and that although there were downside risks the strength of the economy is really important at the moment. He added that whether the Fed hike 3 or 4 times this year it’s not going to make a big difference.

  • According to Bloomberg sources high-level trade talks between the US and China have come to a grinding halt as President Trump continues to threaten further tariffs on Chinese goods. There are no current plans to restart talks.
  • German Final CPI m/m 0.1% as expected
  • French Final CPI m/m 0.0% (0.1% Exp)
  • No data of note set for release this morning.
  • Minutes from the ECB’s most recent meeting will be released around midday.
  • We will also be looking out for the release of the UK Government’s latest White Paper on its future relationship with the EU.
  • This afternoon US Inflation will be in focus with the m/m CPI print due at 1.30pm.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1313 +0.02
GBP/USD 1.3222 +0.14
EUR/USD 1.1685 +0.11
AUD/USD 0.7390 +0.33


Time (GMT) Region Data Release Forecast Previous
10.00 EUR Eurozone Industrial Production m/m 1.2% -0.9%
12.30 EUR ECB Monetary Policy Meeting Accounts
13.30 CAD NHPI m/m 0.1% 0.0%
13.30 USD CPI m/m 0.2% 0.2%
13.30 USD Unemployment Claims 226K 231K
19.00 USD Federal Budget Balance -92.3Bn -146.8Bn