Newsletter – 17th August 2017

Morning Bulletin

Yesterday

  • Yesterday morning kicked off with some unexpectedly positive UK employment data across the board.
  • UK Average Earnings jumped to 2.1%, up from a previous 1.8% and better than the expected 1.8% rise.
  • The Claimant Count Change was down 4,200 against an expected rise of 3,200.
  • The Unemployment Rate dropped to a fresh 42-year low of4.4% (4.5% Exp).
  • Sterling did see an initial surge following these releases, with GBP/USD testing the 1.2900 handle, whilst GBP/EUR briefly had a look at the 1.1000 level. Those moves however proved short lived as the Pound slowly declined back to opening levels.
  • Eurozone Flash GDP was inline with expectations with growth of 0.6% reported in Q2.
  • Sources reported yesterday that ECB President Draghi will not unveil a change in the ECB’s policy stance at Jackson Hole and that expectations of a big monetary policy speech are incorrect.
  • US Building Permits 1.22M (1.25M Exp)
  • US Housing Starts 1.16M (1.22M Exp)
  • Perhaps unsurprisingly US President Trump has decided to dissolve his ‘Manufacturing Council’ and ‘Strategic and Policy Forum’ following a raft of CEO’s resigning this week. The resignations stemmed from his lack of condemnation of the white supremacists rally in Charlottesville.   
Overnight

  • The latest US Federal Reserve FOMC meeting minutes revealed a division between officials, with a number of them seeing a chance of low inflation persisting for longer, whilst the others warned that a delay in the gradual removal of accommodation could lead to inflation overshooting the Fed’s 2% target.
  • According to Sky sources the next round of Brexit talks could be on hold until December as the UK Government awaits the results of the German elections.
  • Australia Employment Change 27.9K (19.8K Exp)
  • Australia Unemployment Rate 5.6% (5.6% Exp)
  • New Zealand PPI Input q/q 1.4% (0.9% Exp)
  • According to a Reuters CFO survey, 69% of businesses have yet to adapt strategic planning as a result of Brexit.
Today
  • Plenty of key data to get stuck into today.
  • Key early in the day will be Eurozone Inflation data due at 10am, followed just after midday by the release of minutes the most recent ECB monetary policy meeting.
  • This afternoon there is a raft of US data including Unemployment Claims and Philly Fed.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.0957 +0.10
GBP/USD 1.2888 -0.01
EUR/USD 1.1757 -0.07
AUD/USD 0.7954 +0.37

 

Time (GMT) Region Data Release Forecast Previous
09.20 AUD RBA Assist Gov Ellis Speaks
09.30 GBP Retail Sales m/m 0.2% 0.6%
10.00 EUR Eurozone Final CPI y/y 1.3% 1.3%
12.30 EUR ECB Monetary Policy Minutes
13.30 CAD Manufacturing Sales m/m -1.0% 1.1%
13.30 USD Unemployment Claims 240K 244K
13.30 USD Philly Fed Manufacturing Index 18.3 19.5
14.15 USD Capacity Utilization Rate 76.7% 76.6%
14.15 USD Industrial Production m/m 0.3% 0.4%
15.00 USD CB Leading Index m/m 0.3% 0.6%