Newsletter – 14th January 2019

Morning Bulletin

Friday

  • Sterling was the best performer in FX space Friday due in small part to solid economic data but largely due to Brexit related headlines.
  • Reports from the Evening Standard claimed Cabinet Ministers had spoken of an increasing likelihood that the Brexit process could be delayed beyond the 29th March deadline. With six essential bills still needing to be passed, ministers are convinced the current timetable would have to be extended.
  • Shortly after this report the PM’s office saught to set the record straight insisting that all the necessary legislation would be in place to allow the UK to leave the European Union by the 29th March. However that appeared to fall on deaf ears as the Pound continued to strengthen.
  • GBP/USD had rallied to a 7-week high of 1.2865 by late Friday afternoon, having been trading as low as 1.2709 in the morning.
  • GBP/EUR briefly traded with a 1.1200 handle Friday afternoon for the first time this year. The pair had opened the day around 1.1050.
  • Earlier in the morning UK GDP grew for a second consecutive month, with the economy expanding by 0.2% in November having grown 0.1% in October. Growth of 0.1% had been forecast.
  • US CPI m/m -0.1% as expected.
Overnight

  • According to the Guardian, officials in Brussels are expecting the UK to request an extension to Article 50 with Theresa May’s deal likely to be voted down in Tuesday’s vote. The EU is preparing to delay the deadline to July as the initial deadline of 29th March is now looking unrealistic given the political situation in the UK.
  • Labour Party Leader Jeremy Corbyn has vowed to table a vote of no-confidence in Theresa May’s Government should her Brexit plan get defeated in the commons. Speaking to the Andrew Marr show Corbyn said the motion would come at the time of his choosing but it would be soon.
  • Australia MI Inflation Gauge m/m 0.4% (0.0% Previous)
  • China Trade Balance 395Bn (345Bn Exp)
  • German WPI (Wholesale) m/m -1.2% (0.3% Exp)
Today
  • Incredibly sparse data calendar today. Eurozone Industrial Production the only print to look out for at 10am.
  • Look out for movement in Sterling currency pairs as the vote on Theresa May’s Brexit deal is due to take place tomorrow.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1185 -0.12
GBP/USD 1.2831 -0.03
EUR/USD 1.1469 +0.01
AUD/USD 0.7190 -0.33

 

Time (GMT) Region Data Release Forecast Previous
10.00 EUR Industrial Production m/m 0.3% 0.2%
21.00 NZD NZIER Business Confidence -30
21.45 NZD FPI m/m -0.6%