Newsletter – 15th March 2019

Morning Bulletin

Yesterday

  • Given the volatility witnessed this week the Pound traded relatively calmly in FX space yesterday, but perhaps unsurprisingly it did drift back down from the highs seen in the morning.
  • GBP/EUR closed the day down -0.17% at 1.1729.
  • GBP/USD closed the day down -0.57% at 1.3257.
  • There was no data to digest during the morning’s trading.
  • Into the afternoon and there were a raft of more low key US data releases:
    • Import Prices m/m 0.6% (0.3% Exp)
    • Unemployment Claims 229K (225K Exp)
    • New Home Sales 607K (622K Exp)
  • Donald Tusk is reportedly going to ask European Leaders to be open to a long extension on Brexit if the UK needs time to re-think its strategy to leaving the EU.
  • Germany’s Ifo institute slashed their growth forecasts for the country yesterday. GDP for 2019 was cut to just +0.6% from a previous +1.1% with weaker foreign demand for industrial goods cited as a key factor.
  • The Swiss Government similarly cut their own growth forecasts yesterday, with GDP for 2019 expected to be +1.1%, down from a previous +1.5%.
Overnight

  • Once again overnight news dominated by Brexit and the last round of this weeks votes in the commons. As widely expected MP’s voted by a large majority, 413 to 202, in favour of extending Article 50 and delaying Britain’s departure from the EU. PM Theresa May will now formally ask the EU for an extension, however the time frame of that extension, if granted is still an unknown.
  • Whilst the above was the headline vote of the day as it were, there was almost a shock result with one amendment which effectively sought to make the commons central to the process going forward falling short of defeating the Government by just 2 votes (312 to 314).
  • As expected the Bank of Japan held interest rates at -0.10% overnight and maintained monetary policy. They did however downgrade their view on the economy amid a ‘slowdown in overseas economies’.
  • According to the Telegraph: Despite the Attorney General’s attempts to add additional legal opinion on Theresa May’s Brexit deal overnight it would appear Brexiteer MP’s are still unprepared to support the deal in its current guise. Mrs May’s deal, despite being defeated heavily twice, is potentially seen by some now as the Brexiteers last hope of securing the UK’s exit from the European Union.
  • German Wholesale Price Index m/m 0.3% as expected.
Today
  • Eurozone Inflation data the headline print at 10am this morning.
  • This afternoon there are a number of more low to medium impact data releases out of Canada and the United States.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1686 -0.34
GBP/USD 1.3233 -0.05
EUR/USD 1.1321 +0.16
AUD/USD 0.7086 +0.34

 

Time (GMT) Region Data Release Forecast Previous
10.00 EUR Final CPI y/y 1.5% 1.5%
TBC GBP Consumer Inflation Expectations 3.2%
12.30 CAD Manufacturing Sales m/m 0.4% -1.3%
12.30 USD Empire State Manufacturing Index 10.1 8.8
13.15 USD Capacity Utilization Rate 78.5% 78.2%
13.15 USD Industrial Production m/m 0.4% -0.6%
14.00 USD Prelim UoM Consumer Sentiment 95.5 93.8
14.00 USD JOLTS Job Openings 7.27M 7.34M