Newsletter – 18th December 2018

Morning Bulletin


  • In a blow to the ECB having just announced the end to their bond-buying program, the annual rate of inflation in the Eurozone dropped back to 1.9% in November from an expected 2.0%. It’s a blow to the ECB as their bond-buying program was designed to boost consumer prices.
  • The Eurozone Trade Surplus also fell to 12.5Bn in October from a previous 13.0Bn, and comfortably short of the 14.2Bn expected.
  • Following another marathon commons sessions yesterday afternoon, and just as UK PM Theresa May was about to leave the Chamber, Labour Leader Jeremy Corbyn tabled a motion of no confidence in the PM following her decision to postpone the meaningful vote on her Brexit Deal to the second week of January. However the Government is highly unlikely to entertain the motion and has said no time will be allocated to debate it. If the Labour Leader genuinely felt there was an appetite he would have sought to table a vote of no confidence in the Government itself.
  • Perhaps the fact that Sterling was unmoved following Corbyn’s statement says it all.
  • During yesterday’s session PM Theresa May said she had had a robust exchange with EU Leaders following her most recent visit to Brussels. Despite messages from the EU to the contrary on further negotiations, Mrs May insisted that EU Leaders have been clear in that they do not wish to use the backstop and that there is no plot to keep the UK in the backstop.

  • Minutes from the Reserve Bank of Australia’s December meeting revealed that members were concerned about tightening credit and sluggish consumption. Whilst they stuck to their previous growth forecasts this time around and members believed the next move in interest rates was likely to be up, a reassessment of those growth forecasts looks likely at their next meeting.
  • Massive downward revision to growth forecasts out of Japan overnight. The Japanese Government have slashed GDP forecasts to 0.9% in 2018 and 1.3% in 2019; both forecasts revised down from 1.5%.
  • Later this morning, UK PM Theresa May and her Cabinet will discuss whether the Government should ramp up plans and preparations for a no-deal Brexit.
  • According to the British Chambers of Commerce the UK is set to endure it’s slowest period of growth since 2009 this year and next. The slowdown resulting from falling business investment and weak consumer demand with Brexit looming closer.
  • Very sparse data calendar today.
  • German business confidence will be the key print this morning at 9am.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1111 -0.08
GBP/USD 1.2636 +0.13
EUR/USD 1.1369 +0.19
AUD/USD 0.7188 +0.15


Time (GMT) Region Data Release Forecast Previous
09.00 EUR German IFO Business Climate 101.8 102.0
13.30 CAD Manufacturing Sales m/m 0.3% 0.2%
13.30 USD Building Permits 1.27M 1.26M
13.30 USD Housing Starts 1.23M 1.23M
TBC NZD GDT Price Index 2.2%
20.00 NZD Westpac Consumer Sentiment 103.5
21.45 NZD Current Account -5.94B -1.62Bn