Newsletter – 16 February 2017

Morning Bulletin


  • Sterling was on the back-foot for most of yesterday’s trading following some slightly mixed UK data in the morning. Despite the number of people claiming unemployment related benefits plummeting by some 42,400 (1,100 increase expected) and the official Unemployment rate remaining at4.8%, it was the drop in Average Earnings that seemed to hit the Pound.
  • The UK Average Earnings Index grew more slowly than forecast at the end of 2016, up 2.6% against an expected rise of 2.8%.
  • The US Dollar was already on the march yesterday morning following Fed Chair Yellen’s hawkish commentary the previous afternoon; with the US Dollar Index hitting a fresh 4 week high. The Dollar found further strength yesterday afternoon following the release of impressive US data:
    • CPI m/m 0.6% (0.3% Exp)
    • Retail Sales m/m 0.4% (0.1% Exp)
    • Empire State Manufacturing Index 18.7 (7.2 Exp)
  • This much better than expected data, coupled with Fed Chair Yellen’s comments about a potential rate hike coming sooner rather than later saw the Federal Funds Rate predicting a 40% chance of a rate hike in March; up from the 25% chance priced in before the data was released.
  • The European parliament has backed the EU-Canada Trade Agreement (CETA). It wasn’t quite a procession however with 408 MEP’s in favour of the deal, and some 254 against.

  • Key Aussie Employment data released overnight:
    • Employment Change +13.5K (+9.7K Exp)
    • Unemployment Rate 5.7% (5.8% Exp)
  • Three US Fed members on the wires overnight:
    • Dudley: See’s Fed hiking rates in the months ahead
    • Bullard: Prefers a ‘why not wait’ approach, suggesting the Fed ought not to rush until Trump administration reveals fiscal policies.
    • Rosengren: Particularly hawkish, suggesting there could be a need for more than 3 rate hikes this year.

  • US economic data is once again likely to dominate the day ahead, as from 1.30pm we get the release of key housing, unemployment and manufacturing data.
  • Also worth looking out for the minutes of the ECB’s most recent monetary policy meeting and that is set to be for released around 12.30pm.


Current at time of distribution

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1754 -0.01
GBP/USD 1.2491 +0.32
EUR/USD 1.0626 +0.27
AUD/USD 0.7708 +0.01


Current at time of distribution
Time (GMT) Region Data Release Forecast Previous
09.00 EUR Italian Trade Balance 4.00Bn 4.20Bn
12.30 EUR ECB Monthly Policy Meeting Accounts
13.30 USD Building Permits 1.23M 1.21M
13.30 USD Philly Fed Manufacturing Index 18.5 23.6
13.30 USD Unemployment Claims 243K 234K
13.30 USD Housing Starts 1.23M 1.23M
21.45 NZD Retail Sales q/q 1.1% 0.9%