Newsletter – 15th May 2018

Morning Bulletin

Yesterday

  • There was no data of any note chalked up for release during yesterday’s trading, as a result moves in FX space were limited.
  • According to ECB Member Villeroy the end of the ECB’s massive bond buying program is nearing it’s conclusion, however he said whether that happens in September or December is not an existential question. He also added that a rate rise could come in a matter of quarters rather than years, and believes the slowdown in inflation is temporary and will resume its progress in the coming months.
  • The EU’s Chief Brexit Negotiator Barnier is set to tell ministers from the remaining 27 EU member states that little progress has been made on how the UK intends to resolved the Irish border issue.
  • Negotiators from the US, Canada and Mexico are set to miss House Speaker Paul Ryan’s deadline for concluding talks this week and reworking the 24-year old deal. The current NAFTA agreement will continue to operate unless one country withdraws which would require a 6-month notice period.
  • Speaking yesterday afternoon US Fed Member Mester said she supported gradual rate increases. She added that inflation had not yet reached the Central Bank’s 2% target in a sustained fashion, thus arguing against a steeper path of hikes. The Fed is currently forecasting another two rate hikes this year.
Overnight

  • Minutes from the Reserve Bank of Australia’s most recent monetary policy meeting revealed they saw little reason to lift interest rates as inflation and wage growth are likely to remain sluggish. The RBA do however see the next move in rates more likely to be up rather than down.
  • According to US Commerce Secretary Wilbur Ross, The Trump administration would be prepared to give Canada another exemption to the aluminium and steel tariffs if NAFTA talks are going well. Canada and Mexico currently have a 30-day exemption which is due to end on the 1st June.
  • China Industrial Production y/y 7.0% (6.4% Exp)
  • China Retail Sales y/y 9.4% (10.0% Exp)
  • German Prelim GDP q/q 0.3% (0.4% Exp)
  • French Final CPI m/m 0.2% (0.1% Exp)
  • Swiss PPI m/m 0.4% (0.3% Exp)
Today
  • The week properly begins today with a raft of economic data set for release.
  • UK and EU data will be in focus this morning, most closely watched will be UK Average Earnings Index at 9.30am.
  • This afternoon US Retail Sales will headline at 1.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1347 -0.18
GBP/USD 1.3532 -0.17
EUR/USD 1.1926 0.00
AUD/USD 0.7514 -0.11

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Average Earnings Index 3m/y 2.7% 2.8%
09.30 GBP Claimant Count Change 13.3K 11.6K
09.30 GBP Unemployment Rate 4.2% 4.2%
10.00 EUR Flash GDP q/q 0.4% 0.4%
10.00 EUR German ZEW Economic Sentiment -8.0 -8.2
10.00 EUR Industrial Production m/m 0.6% -0.8%
13.30 USD Retail Sales m/m 0.4% 0.6%
13.30 USD Empire State Manufacturing Index 15.1 15.8
15.00 USD Business Inventories m/m 0.2% 0.6%
TBC NZD GDT (Dairy) Price Index -1.1%