Newsletter – 16th August 2017

Morning Bulletin


  • We saw an already under pressure sterling weaken further yesterday as UK CPI y/y came in short of expectations.
  • UK CPI y/y came in at 2.6% when 2.7% was expected. RPI input m/m also fell short of expectations coming in at 0.0% vs 0.4% expected. RPI y/y beat estimates at 3.6% vs 3.5%.
  • GBP/USD began Tuesday trading at 1.2963 but fell by three quarters of a percent on the day following the UK inflation figures to close at 1.2866.
  • GBP/EUR also posted losses on the day with the pair closing down a third of percent despite starting the day positively reaching a high of 1.1046. We closed down at 1.0966 which is very close to the lowest point GBP/EUR has traded since October 2016.
  • The euro kept up its recent momentum posting another day of gains against the US dollar. EUR/USD close above 1.18 for the first time since January 2015.
  • We saw a strong set of retail sales data from the US yesterday afternoon with core retail sales m/m beat expectations at 0.5% vs 0.3% and retail sales m/m coming in at 0.6% vs 0.3%.
  • US officials set about reducing fears of a nuclear war with North Korea by saying that there was no imminent threat of that fear becoming a reality.
  • UK Brexit minister David Davis revealed he will seek to retain a custom union with the EU for a transitional period of two years.
  • North Korean leader Kim Jong-Um softened his rhetoric overnight and signaled that he would hold off an attack on the US island territory of Guam.
  • New Zealand GDP price index came in at -0.4% overnight and wage price index q/q from Australia matched expectations coming in at 0.5%.
  • This morning we have data from the UK at 9.30am in the form of average earnings index 3m/y and unemployment rate. Following this at 10am we see flash GDP q/q from the Eurozone.
  • Our attention then turns to the US as we expect building permits data at 1.30pm beofre the FOMC meeting minutes are released at 7pm this evening.
  • The UK Government will look to outline how the UK and Ireland can achieve a friction-less border after Brexit.
Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.0977 +0.10
GBP/USD 1.2853 -0.10
EUR/USD 1.1709 -0.21
AUD/USD 0.7858 +0.49


Time (GMT) Region Data Release Forecast Previous
09:30 GBP Average Earnings Index 3m/y 1.8% 1.8%
09:30 GBP Claimant Count Change 3.2K 5.9K
09:30 GBP Unemployment Rate 4.5% 4.5%
10:00 EUR Flash GDP q/q 0.6% 0.6%
13:30 USD Building Permits 1.25m 1.28m
13:30 USD Housing Starts 1.22m 1.22m
19:00 USD FOMC Meeting Minutes