Newsletter – 14th March 2018

Morning Bulletin


  • Much of the focus of yesterday’s trading was on UK Chancellor Phillip Hammond and his Spring Statement. And in a bullish and upbeat assessment of the economy the Chancellor even described himself as ‘positively Tigger-like’ in his optimism. Mr Hammond said the UK economy had reached a turning point and that there was light at the end of the tunnel.
  • Some of the key points from the Statement included:
    • UK Economic growth forecast revised up to +1.5% from +1.4% for 2018
    • The Government will borrow £45.2Bn in the 2017-18 fiscal year; £4.7Bn lower than previously forecast
    • A Tax reduction for the least polluting vans, to help British White Van drivers go green
    • Looking into a new ‘Tech Tax’ and how firms like Google and Facebook are taxed
  • The Pound reacted solidly to the Chancellor’s upbeat assessment, most noatbly against the US Dollar. Having been trading just shy of the 1.3900 handle all morning, Sterling rallied to a two-week high of 1.3962 shortly after, with the Pound eventually hitting another day’s high of 1.3993 later in the afternoon.
  • That Dollar weakness was also in part due to the news that broke of President Trump sacking his Secretary of State Rex Tillerson after just a year of service to the Whitehouse. Mr Tillerson will be replaced by the current Director of the CIA Mike Pompeo.
  • US Consumer Price Inflation was in-line with expectations at+0.2% in February.
  • The Canadian Dollar was one of yesterday’s biggest fallers following commentary from Bank of Canada Governor Poloz. The BOC Governor said the economy still has a degree of untapped potential and that further growth was possible without seeing rising inflation. This was deemed as dovish by markets and investors with rate hikes seemingly off the table in the near-term.

  • According to the Sun newspaper Theresa May and her Brexit war committee have finally agreed upon the terms of the UK’s transition phase out of the EU, which will include a concession on keeping borders open until 2021. This comes ahead of a crunch meeting with 27 EU ambassadors in Brussels tomorrow.
  • China Industrial Production y/y 7.2% (6.2% Exp)
  • China Fixed Asset Investment ytd/y 7.9% (7.0% Exp)
  • New Zealand Current Account -2.77Bn (-2.45Bn Exp)
  • Speaking overnight Reserve Bank of Australia Asst Gov Kent said the RBA was making gradual progress towards growth and inflation goals, therefore a rate hike is unlikely to come anytime soon.
  • German Final CPI m/m 0.5% as expected
  • Little data this morning, Eurozone Industrial Production due at 10am is the only figure of note.
  • This afternoon US Retail Sales and Producer Price Inflation will be key at 12.30pm.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1267 -0.02
GBP/USD 1.3943 -0.10
EUR/USD 1.2375 -0.11
AUD/USD 0.7884 +0.33


Time (GMT) Region Data Release Forecast Previous
10.00 EUR Employment Change q/q 0.3% 0.4%
10.00 EUR Industrial Production m/m -0.4% 0.4%
12.30 USD Retail Sales m/m 0.3% -0.3%
12.30 USD PPI m/m 0.1% 0.4%
14.00 USD Business Inventories m/m 0.6% 0.4%
21.45 NZD GDP q/q 0.8% 0.6%