Newsletter – 13th September 2017

Morning Bulletin

Yesterday

  • Sterling had a very strong day yesterday following better than expected inflation data from the UK.
  • The headline CPI y/y came in at 2.9% when the expected figure was 2.8%, PPI input m/m came in at 1.6% vs 1.2% and RPI y/y came in at 3.9% vs 3.7%.
  • Sterling rallied off the back of these figures gaining 0.91% against the US dollar and 0.85% on the euro.
  • GBP/USD opened at 1.3162 but closed at a 12-month high at 1.3282 and GBP/EUR opened at 1.1010 and closed at 1.1104.
  • At 3pm JOLTS job openings from the US also came in better than expected at 6.17m vs 5.96m.
  • UK Chancellor Hammond said yesterday that the economy was in good shape in 2015 but has been overshadowed by the uncertainty generated by Brexit.
  • ECB Vice President Constancio claimed that central bank tools deemed unconventional have largely worked and should remain part of the ECB’s toolkit despite some deficiencies.
  • Constancio also said the ECB would eventually hit its mandate.
  • North Korea’s ambassador to Russia said that Pyongyang will not change its policies regardless of sanction placed upon it by the international community. He also said that North Korea’s nuclear program will help the country ‘deter the hostile policy of the US’ and stated that their next measures will cause the US ‘the worst pain it has ever known’.

Overnight

  • Overnight we had PPI m/m from China come in better than expected at 0.3% vs 0.2%.
  • Sterling fared well against all major currencies yesterday with GBP/AUD, GBP/NZD and GBP/JPY closing up by 0.95% (1.6547) , 0.42% (1.8223) and 1.61% (146.30).

Today

  • This morning we have more data from the UK in the form of average earnings index 3m/y, claimant count change and unemployment rate.
  • From the US we have PPI m/m and core PPI m/m at 1.30pm.
Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1110 +0.08
GBP/USD 1.3320 +0.28
EUR/USD 1.1985 +0.16
AUD/USD 0.8038 +0.26

 

Time (GMT) Region Data Release Forecast Previous
09:30 GBP Average Earnings Index 3m/y 2.3% 2.1%
09:30 GBP Claimant Count Change 0.8K -4.2K
09:30 GBP Unemployment Rate 4.4% 4.4%
13:30 USD PPI m/m 0.3% -0.1%
13:30 USD Core CPI m/m 0.2% -0.1%
15:30 USD Crude Oil Inventories 4.1m 4.6m