Newsletter – 17th October 2017

Morning Bulletin

Yesterday

  • Yesterday turned out to be a typically subdued Monday in FX markets with a limited amount of data set for release.
  • The only figure of note during the morning session saw the Eurozone’s Trade Balance produce a slightly better than expected surplus of 21.6 Billion (20.3Bn Exp).
  • The only data released in the afternoon came out of North America and it was pretty mixed. There was a sharp decline in Canadian Foreign Securities Purchases, with the CAD$9.85Bn figure falling well short of the expected CAD $20.05Bn.
  • In stark contrast the US Empire State Manufacturing Index jumped to a 3-year high with a survey reading of 30.2, eclipsing the expected 20.3. The survey is a measure of business activity of manufacturing firms operating in New York.
  • Speaking yesterday afternoon UK Finance Minister Hammond said he does not believe Brexit negotiations are at an impasse with the EU, and furthermore he does not think the probability of a no-deal scenario has risen.
  • These comments from Phillip Hammond came ahead of a meeting scheduled between UK PM Theresa May and EU Comission President Junker and Brexit Minister Barnier.
Overnight

  • Following the aforementioned meeting both UK MP May and the EU’s Juncker agreed Brexit negotiations should accelerate over the coming months, following informal discussions in a friendly atmosphere.
  • New Zealand CPI q/q +0.5% (+0.4% Exp)
  • Minutes from the Reserve Bank of Australia’s most recent meeting revealed they are in no rush to hike interest rates in-line with their peers (i.e. Federal Reserve), with price pressures remaining subdued and households still under a heavy burden of debt. The RBA said they welcomed the moves toward higher interest rates elsewhere in the world, but that it does not have mechanical implications for the the setting of policy in Australia.
Today
  • Very busy data calendar with UK Inflation headlining at 9.30am this morning. The CPI y/y print is expected to hit 3.0% in September, up from 2.9% in August.
  • There are also a raft of key Eurozone prints including consumer confidence at 10am and inflation at 11am.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1272 +0.37
GBP/USD 1.3266 +0.12
EUR/USD 1.1768 -0.23
AUD/USD 0.7857 +0.10

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP CPI y/y 3.0% 2.9%
09.30 GBP PPI Input m/m 1.2% 1.6%
10.00 EUR German ZEW economic Sentiment 20.1 17.0
11.00 EUR Eurozone Final CPI y/y 1.5% 1.5%
11.15 GBP BOE Gov Carney Speaks
13.30 USD Import Prices m/m 0.6% 0.6%
14.15 USD Capacity Utilization Rate 76.2% 76.1%
14.15 USD Industrial Production m/m 0.3% -0.9%
TBC NZD GDT (Dairy) Price Index -2.4%
18.00 USD Fed Member Harker Speaks