Newsletter – 15th August 2018

Morning Bulletin

Yesterday

  • Mixed UK jobs data kicked off trading yesterday morning. Despite the number of those claiming unemployment benefit rising by 6,200 (2,300 Exp) the overall Unemployment rate fell to a new 43-year low of 4.0% during July. Unemployment had been expected to remain at 4.2%.
  • The record low in Unemployment did not not translate into strong wage growth however. In fact at 2.4% wages grew at their slowest pace in 9 months, a figure that will not be welcomed by the Bank of England whose recent rate hike was partly based on expectations of strengthening wages.
  • The Pound did very briefly rally following this data, however with the exception of the Euro the Pound closed the day down against it’s other major currency counterparts.
  • Most notably the Pound fell to its lowest level since the end of June 2017 against the US Dollar, briefly trading down at 1.2704.
  • Economic growth in the Eurozone was better than originally forecast in the second quarter of 2018, with the GDP reading of 0.4% bettering the earlier estimate of 0.3%.
  • That GDP reading was however dampened somewhat by a sharp fall in Industrial Production, with a decline of -0.7% during June. A fall of -0.3% was expected, but the sharper decline was attributed to a collapse in machinery and equipment investment.
  • Speaking yesterday, Turkish President Erdogan has said Turkey will boycott electronic products from the United States.
  • US NFIB Small Business Index 107.9 (106.9 Exp)
  • US Import Prices m/m 0.0% (0.1% Exp)
Overnight

  • Australia Wage Price Index q/q 0.6% as expected
  • Australia Westpac Consumer Sentiment -2.3% (3.9% Exp)
  • According to Reuters the US is preparing further sanctions on Turkey is jailed Pastor Brunson is not released.
  • Ahead of a 3-day tour of Europe, UK Foreign Secretary Jeremy Hunt has called on th EU to change its approach to Brexit as the risk of a No-Deal Brexit continues to increase.
Today
  • UK inflation data is the key print this morning. Due at 9.30am inflation is forecast to rise to 2.5% y/y.
  • This afternoon there will be a raft of US economic data, with Retail Sales headlining at 1.30pm.
  • Worth noting it is a French and Italian Bank Holiday today.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1222 +0.14
GBP/USD 1.2716 0.00
EUR/USD 1.1330 -0.12
AUD/USD 0.7227 -0.19

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP CPI y/y 2.5% 2.4%
09.30 GBP PPI Input m/m 0.1% 0.2%
13.30 USD Retail Sales m/m 0.1% 0.5%
13.30 USD Empire State Manufacturing Index 20.1 22.6
14.15 USD Capacity Utilization Rate 78.2% 78.0%
14.15 USD Industrial Production m/m 0.3% 0.6%
15.00 USD Business Inventories m/m 0.2% 0.4%