Newsletter – 15th January 2018

Morning Bulletin


  • There was very little data to digest Friday morning.
  • The Euro enjoyed a strong day’s trading, and was arguably the best perfomer, with the single currency buoyant on reports that German Chancellor Angela Merkel’s CDU party had made a breakthrough in German Government coalition talks, with the belief an initial deal had been struck with Martin Schulz’s SPD party.
  • The Euro traded to a 3-year high versus the US Dollar, hitting 1.2185 before the end of the day. Meanwhile GBP/EUR did trade as low as 1.1199, however the Pound found support upon it’s own favourable rumours.
  • The other big story which saw the Pound rally in FX space, was that of the Spanish and Dutch Finance Ministers working closely to push for a soft Brexit deal which would keep the UK as close to the EU as possible.
  • According to a person familiar with the situation, Spanish Minister Luis De Guindos and Dutch Minister Wopke Hoeskstra had a meeting earlier in the week to discuss their common interests in Brexit. Both Ministers were concerned about the impact of tariffs on trade, and also the loss of the UK’s financial contributions to the EU Budget.
  • The only key data Friday was out of the United States:
    • CPI m/m (Dec) 0.1% as expected
    • Retail Sales m/m (Dec) 0.4% (0.5% Exp)
    • Business Inventories m/m 0.4% as expected
Over The Weekend

  • The Japanese Yen is trading solidly this morning following comments from BOJ Governor Kuroda. The Governor reiterated the central bank’s plans to maintain their QE program, but his comments around inflation and the economy underpinned Yen strength.
  • US Fed Member Rosengren said there remains a strong case for three or more rate hikes in 2018, due to stronger economic growth and declining unemployment, in part from the short-term boost the new tax cuts will bring.
  • ECB Member Weidmann has played down risks of an imminent rate hike from the central bank. Markets and investors had been starting to price in a hike following the release of minutes from the ECB’s December meeting, in which policymakers showed they were preparing for a change in their message to reflect improved economic outlook.
  • There is absolutely no data of any note due for release today
  • Today is a US Bank Holiday – Martin Luther King Day


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1236 -0.13
GBP/USD 1.3748 +0.16
EUR/USD 1.2234 +0.26
AUD/USD 0.7953 +0.51