Newsletter – 16th July 2019

Morning Bulletin

Yesterday

  • There was no economic data to report on yesterday.
  • Speaking yesterday afternoon UK Chancellor Philip Hammond said that whilst he did not want to make life difficult for the next PM, whether that be Boris Johnson or Jeremy Hunt, he would still do everything he could to fight against a no-deal Brexit. Confirming he would step down as Chancellor when the next PM takes office, Hammond added he would work to block any attempts to sever ties with the EU without a transition deal in place that could help soften the economic shock.
  • Germany’s Ursula von der Leyen, many’s favourite to become the next European Commission President, has said she would be open to giving the UK a further Brexit extension but only if good reason were provided.
  • US Empire State Manufacturing Index 4.3 (1.6 Exp)
  • Speaking at a leadership debate yesterday both Boris Johnson and Jeremy Hunt have suggested even a significant change to the Irish backstop would not be enough to win them over and that the backstop needs to be scrapped altogether. That would appear to be setting the bar incredibly high as the backstop has been one of Brussels unrelenting red lines and a key reason for Mrs May’s failures and ultimately end to her Premiership.
Overnight

  • Sterling is under pressure yet again this morning as fears of a no-deal Brexit under a Boris Johnson Government continue to weigh on the Pound.
  • New Zealand CPI q/q 0.6% as expected
  • Credit ratings agency Fitch believe the US Fed will cut rates by less than current market expectations in 2019. Fitch expect just one rate cut of 25bp given the robust US jobs growth.
  • Minutes from the most recent Reserve Bank of Australia meeting appear to have left the door open to further rate cuts in the near/medium term having cut rates to an all time low of 1% earlier this month. The RBA are concerned about the jobs market and a lack of wage growth for Australian workers.
Today
  • We have a stacked data calendar today.
  • This morning UK employment data headlines at 9.30am.
  • This afternoon there are a raft of US releases with Retail Sales the key figure at 1.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1088 -0.22
GBP/USD 1.2469 -0.37
EUR/USD 1.1247 -0.09
AUD/USD 0.7028 -0.15

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Average Earnings Index 3m/y 3.1% 3.1%
09.30 GBP Unemployment Rate 3.8% 3.8%
10.00 EUR German ZEW Economic Sentiment -22.1 -21.1
10.00 EUR Eurozone Trade Balance 16.4Bn 15.3Bn
13.30 USD Retail Sales m/m 0.1% 0.5%
13.30 USD Import Prices m/m -0.7% -0.3%
14.15 USD Capacity Utilization Rate 78.2% 78.1%
14.15 USD Industrial Production m/m 0.1% 0.4%
15.00 USD Business Inventories m/m 0.4% 0.5%
18.00 USD Fed Chair Powell Speaks