Newsletter – 16th August 2018

Morning Bulletin

Yesterday

  • UK Inflation rose for the first time in 2018 during July, according to figures from the ONS. The Consumer Price Index rose 2.5% during July, that was up from 2.4% in the previous 3 months. This won’t be welcome news for consumers as once again Inflation is keeping pace with average earnings and squeezing household spending.
  • There were also a raft of other UK inflation numbers released at the same time yesterday morning which included:
    • Producer Price Index (Input) m/m 0.5% (0.1% Exp)
    • Retail Price Index y/y 3.2% (3.4% Exp)
    • House Price Index y/y 3.0% (2.7% Exp)
  • The pound was largely unmoved off the back of the data.
  • US economic data dominated the afternoon and whilst the data was mixed on the whole, the key Retail Sales print impressed with a 0.5% increase reported for the month of July. That was far better than the 0.1% rise expected, and means US Retail Sales have increased by 6.4% over the past 12 months.
  • Some of the other US figures released included:
    • Empire State Manufacturing Index 25.6 (20.1 Exp)
    • Industrial Production m/m 0.1% (0.3% Exp)
    • Business Inventories m/m 0.1% (0.2% Exp)
  • Shortly after the US data was released GBP/USD plummeted to a fresh 14-month low of 1.2661 before recovering to close the day around the 1.2700 handle.
  • The Turkish Lira found some respite late yesterday afternoon as it emerged Qatar is prepared to invest $15 billion into the country, that followed talks between Turkish President Erdogan and Qatar’s Sheikh Temim bin Hamed Al Sani.
Overnight

  • The Aussie Dollar is on the back-foot this morning following some mixed employment data for July. Similar to the UK a couple of days ago the official unemployment rate has dropped, however there was a big miss on the number of people employed during the previous month:
  • Australia Employment Change -3.9K (15.0K Exp)
  • Australia Unemployment Rate 5.3% (5.4% Exp)
  • Japan Trade Balance -0.05Tn (0.02Tn Exp)
Today
  • UK Retail Sales for the month of July is the key print this morning. Sales are expected to have risen a steady 0.2% m/m.
  • Raft of US data this afternoon but nothing particularly high impact.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1180 -0.10
GBP/USD 1.2714 +0.16
EUR/USD 1.1370 +0.22
AUD/USD 0.7263 +0.33

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Retail Sales m/m 0.2% -0.5%
10.00 EUR Trade Balance 17.0Bn 16.9Bn
13.30 CAD Manufacturing Sales m/m 1.0% 1.4%
13.30 USD Building Permits 1.31M 1.29M
13.30 USD Housing Starts 1.27M 1.17M
13.30 USD Philly Fed Manufacturing Index 21.9 25.7
13.30 USD Unemployment Claims 215K 213K