Newsletter – 14th February 2019

Morning Bulletin

Yesterday

  • Theresa May cooled suggestions that she could force MPs to choose between backing her deal or accepting a delay of Brexit. ITV news has been reporting that UK chief negotiator Olly Robbins was overheard saying that the EU was likely to allow an extension to the Brexit process.
  • Mrs May said that MPs should not rely on “what someone said to someone else as overheard by someone else, in a bar. It is very clear that the government’s position is the same”.
  • UK inflation came in at 1.8% vs 1.9% expected, falling below 2% for the first time since 2017. PPI input m/m came in weaker than expected at -0.1% vs 0.2% and RPI y/y came in weaker at 2.5% vs 2.6% expected.
  • Members of the Tory anti-EU European Research Group met Chief Whip Julian Smith to insist that leaving the bloc without an agreement must remain an option.
  • Meanwhile, Scottish First Minister Nicola Sturgeon called for PM May to rule out a no deal Brexit. Sturgeon said the government are being “increasingly reckless and negligent” by not ruling out leaving with no deal in place.
  • The Guardian were reporting yesterday that more than 40 former British ambassadors and high commissioners have written to Theresa May warning her that Brexit has turned into “a national crisis” and have urged her to delay proceedings until the government has greater clarity about Britain’s likely relationship with the EU.
  • Germany’s economy narrowly avoided entering a recession during the final three months of last year. The country’s Federal Statistics Office said that Europe’s largest economy registered no growth in the fourth quarter of 2018.
  • We had US inflation figures at 1.30pm. US CPI m/m came in weaker than expected at 0.0% vs 0.1%. Core CPI m/m came in as expected at 0.2%.
  • Sterling had a mixed day gaining 0.23% on the euro and losing 0.36% on the US dollar.
    • GBP/EUR opened at 1.1379, traded a high of 1.1432, a low of 1.1374 and closed at 1.1407.
    • GBP/EUR opened at 1.2890, traded a high of 1.2958 and closed at 1.2844.
Overnight
  • Japanese preliminary GDP q/q came in weaker than expected at 0.3% vs 0.4%.
  • Trade balance from China came in at 271B vs 241B.
  • GBP/AUD, GBP/NZD and GBP/JPY are currently trading 1.8053, 1.8787 and 142.42, respectively.
Today
  • We will see flash GDP q/q at 10am and will expect that to come in at 0.2%.
  • At 1.30pm we will see manufacturing sales data from Canada and retail sales data from the US.
  • MPs are set to debate and vote on a series of amendments which are designed to change the direction of Brexit today. PM May has requested MPs approve a motion acknowledging that the process is ongoing.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1390 -0.15
GBP/USD 1.2835 -0.07
EUR/USD 1.1269 +0.08
AUD/USD 0.7108 +0.28

 

Time (GMT) Region Data Release Forecast Previous
10:00 EUR Flash GDP q/q 0.2% 0.2%
13:30 CAD Manufacturing Sales m/m 0.3% -1.4%
13:30 USD Core retail sales m/m 0.0% 0.2%
13:30 USD PPI m/m 0.1% -0.2%
13:30 USD Retail Sales m/m 0.1% 0.2%
13:30 USD Core PPI m/m 0.2% -0.1%