Newsletter – 14th June 2017

Morning Bulletin

Yesterday

  • Sterling gained ground on the euro and US dollar yesterday as inflation data came in higher than expected. This coupled with talk of a softer Brexit than anticipated pre-election saw sterling rally throughout Tuesday.
  • UK CPI y/y came in at 2.9% when most estimates were at 2.7% and this gave sterling some respite against the euro by pushing back up to 1.1375 from 1.1308.
  • GBP/USD bounced from lows of 1.2642 to close at 1.2752.
  • Most analysts are still bearish on the pound due to the complexity of the upcoming Brexit negotiations.
  • UK RPI y/y also came in stronger than expected at 3.7% vs 3.5% expected but PPI input m/m was vastly weaker than estimates coming in at -1.3% vs -0.5%.
  • German ZEW economic sentiment disappointed at 18.6 vs 21.6 expected whereas US PPI m/m matched expectations at 0.0%.
Overnight
  • Overnight we saw NZD current account data come in weaker than expected at 0.24B vs 0.95B expected.
  • Chinese industrial production y/y matched expectations at 6.5% and fixed asset investment also came in as expected at 8.6%.
Today
  • This morning we saw UK unemployment data released at 9.30am with average earnings index 3m/y coming in weaker than expected at 2.1% vs 2.4%, claimant count change coming in better than expected at 7.3K vs 12.5K.
  • At 1.30pm we have inflation and retail sales data from the US before the FOMC is expected to raise rates to 1.25% from 1.00% this evening at 7pm. The accompanying FOMC press conference is scheduled for 7.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1366 -0.08
GBP/USD 1.2743 -0.07
EUR/USD 1.1208 +0.01
AUD/USD 0.7580 +0.58

 

Time (GMT) Region Data Release Forecast Previous
13:30 USD CPI m/m 0.2% 0.2%
13:30 USD Core CPI m/m 0.2% 0.1%
13:30 USD Core Retail Sales m/m 0.2% 0.3%
13:30 USD Retail Sales m/m 0.1% 0.4%
19:00 USD FOMC Economic Projections
19:00 USD FOMC Statement
19:00 USD Federal Funds Rate 1.25% 1.00%
19:30 USD FOMC Press Conference
23:45 NZD GDP q/q 0.7% 0.4%