Newsletter – 17th April 2019

Morning Bulletin

Yesterday

  • UK jobs data headlined yesterday morning and was largely in-line with expectations as employers fly in the face of Brexit uncertainty and continue hiring.
  • The Average Earnings Index remained at 3.5% for the 3 months to February, growing at it’s joint fastest pace in over a decade. The overall Unemployment rate was also unchanged from a month earlier at 3.9%.
  • Sterling was however largely unmoved in FX space following the data.
  • The main driver of the Pound yesterday was unsurprisingly Brexit related, and came following comments from Labour Leader Jeremy Corbyn. Corbyn said that the cross-party Brexit talks with the Government had stalled with seemingly little agreement on numerous issues between the two parties although talks are scheduled to continue this week.
  • The Pound was on the back-foot in FX space following Corbyn’s comments, eventually closing the day down -0.22% against the Euro at 1.1564, and down -0.34% against the US Dollar at 1.3049.
  • The Euro itself endured a weak afternoon’s performance as sources told Reuters that a number of ECB policymakers believed the current economic projections from the central bank were too optimistic and have doubts about the growth projections for the second half of the year.
  • German ZEW Economic Sentiment 3.1 (0.9 Exp).
  • Canadian Manufacturing Sales m/m -0.2% (-0.1% Exp).
Overnight

  • The Kiwi Dollar was sold off aggressively in FX markets in the early hours following much weaker than expect quarterly inflation data. The CPI print showed prices picked up by just +0.1% in Q1 of 2019, that was short of the 0.3% expected and has raised the odds of a potential interest rate cut in the coming months.
  • The Kiwi’s currency neighbour, the Aussie Dollar meanwhile rallied in FX space overnight owing to the better than expected Chinese economic data, with the Australian economy being inextricably linked to China’s fortunes.
  • China’s economy recorded growth of 6.4% in the first quarter of 2019 when compared to a year earlier, a figure of 6.3% had been forecast.
  • There was also a massive jump in China’s Industrial Production with the actual reading of 8.5% smashing the 5.6% economists had forecast.
  • Japan Trade Balance -0.18Tn (-0.30Tn Exp)
  • Japan Revised Industrial Production m/m 0.7% (1.4% Exp)
Today
  • Raft of UK and European Data set for release this morning.
  • UK Inflation data will be the headline print at 9.30am.
  • This afternoon the focus will switch to Canadian economic data at 1.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1526 -0.28
GBP/USD 1.3047 +0.02
EUR/USD 1.1318 +0.33
AUD/USD 0.7200 +0.37

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP CPI y/y 2.0% 1.9%
09.30 GBP PPI Input m/m 0.3% 0.6%
10.00 EUR Final CPI y/y 1.4% 1.4%
10.00 EUR Trade Balance 16.8Bn 17.0Bn
13.30 CAD CPI m/m 0.7% 0.7%
13.30 CAD Trade Balance -3.5Bn -4.2Bn
13.30 USD Trade Balance -53.5Bn -51.1Bn
14.00 GBP BOE Gov Carney Speaks
15.00 USD Final Wholesale Inventories m/m 0.4% 1.2%