Morning Bulletin

Yesterday

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.

Overnight

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%.

Today

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.