Newsletter – 17th April 2018

Morning Bulletin

Yesterday

  • There was very little data released yesterday morning.
  • The quiet calendar suited Sterling in particular with the Pound making solid gains against most of its major currency counterparts during the morning session, gains which were then consolidated over the course of the afternoon.
  • GBP/USD accelerated from as low as 1.4236 at the open to a day’s high of 1.4337, edging close to a fresh post-referendum and 2018 high.
  • GBP/EUR didn’t see quite as an aggressive move, but it still advanced some +0.3% on the day with the pair trading close on a 12-month high of 1.1590.
  • Following three straight months of declines US Retail Sales bounced back in March with a rise of +0.6%, bettering the +0.4% expected. Strong car sales was one of the factors attributed to the solid print.
  • US Empire State Manufacturing Index 15.8 (19.8 Exp)
  • US Business Inventories m/m 0.6% as expected
  • Speaking yesterday afternoon US Fed member Dudley said the markets current expectations of another 2-3 rate hikes by the end of 2018 seems appropriate, but any more would be unlikely. Dudley added that whilst inflation remains relatively low the Fed would act in a gradual fashion.
Overnight

  • GBP/USD has continued to press on this morning to new 2018 highs. That also makes it a fresh high since the UK-EU referendum. At the time of writing the pair hit a high of 1.4373.
  • China GDP q/y 6.8% as expected
  • China Industrial Production y/y 6.0% (6.4% Exp)
  • China Retail Sales y/y 10.1% (9.7% Exp)
  • The minutes from the most recent Reserve Bank of Australia meeting revealed policymakers believe the next move in interest rates will be upwards, however they acknowledged that could still be in some time to come, with no case for a rate hike in the near-term.
Today
  • Very busy data calendar ahead, this morning UK Employment data will be in focus at 9.30am.
  • This afternoon there is a plethora of US data from 1.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1581 +0.01
GBP/USD 1.4369 +0.23
EUR/USD 1.2407 +0.23
AUD/USD 0.7787 +0.12

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Average Earnings Index 3m/y 3.0% 2.8%
09.30 GBP Claimant Count Change 13.3K 9.2K
09.30 GBP Unemployment Rate 4.3% 4.3%
10.00 EUR German ZEW Economic Sentiment -0.8 5.1
10.00 EUR Italian Trade Balance 2.23Bn -0.09Bn
13.30 CAD Manufacturing Sales m/m -1.0%
13.30 USD Building Permits 1.33M 1.30M
13.30 USD Housing Starts 1.27M 1.24M
14.15 USD Capacity Utilization Rate 77.9% 78.1%
14.15 USD Fed Member Williams Speaks
14.15 USD Industrial Production m/m 0.3% 1.1%