Newsletter – 18th February 2019

Morning Bulletin


  • UK retail sales unexpectedly bounced back in January with clothing stores in particular seeing a strong pick up in sales. Retail Sales volumes rose +1.0% in January, smashing the modest +0.2% rise expected, and bouncing back from a dreadful December.
  • That print helped put the Pound on the front-foot in FX space during the morning, but Sterling was further reinforced in the afternoon following comments from Irish Foreign Minister Coveney.
  • Despite acknowledging Theresa May’s defeat in the commons will have increased scepticism in the EU that providing more reassurance to the UK on the Irish back-stop alone will be enough to get the majority she needs, Coveney added that ‘the EU is still serious about trying to help…of course the Irish government wants to see a package that will help her get a deal’.
  • Having opened the day at 1.2800, GBP/USD rallied over the day to close just shy of the 1.2900 handle. Whilst GBP/EUR gained around 0.5 of a cent on the day, closing at the 1.1400 handle.
  • There were a raft of US data released Friday afternoon:
    • Import Prices m/m -0.5% (-0.1% Exp)
    • Empire State Manufacturing Index 8.8 (7.1 Exp)
    • Industrial Production m/m -0.6% (0.1% Exp)
    • Prelim UoM Consumer Sentiment 95.5 (93.3 Exp)
  • There were positive noises emanating from both the US and China on Friday regarding trade talks. According to the White House the two parties had made progress in talks, with discussions to continue in Washington next week. Whilst according to Chinese sources, China and the US had reached consensus on a number of key issues and they are close to their final goal.

  • Senior Labour sources have said a small group of Labour MP’s are set to hand in their resignations this morning. Up to several backbenchers who are unhappy with the Leaderships handling of Brexit and the anti-Semitism row are set to break away.
  • Car sales plummeted in China for a seventh consecutive month in January with sales down 15.8% from a year earlier. The reason for the sharp fall was attributed to the slowing overall economy and a consumption decline in small and medium sized cities.
  • US Fed Member Bostic sees one more rate hike this year and another in 2020. He said rates are still a little short of neutral but has no time frame for winding down the balance sheet.
  • Japan Core Machinery Orders m/m -0.1% (-1.1% Exp)
  • UK Rightmove HPI m/m 0.7% (0.4% Previous)
  • No economic data of note set for release today.
  • Please be aware that it is a US bank holiday (President’s Day).


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1414 +0.04
GBP/USD 1.2918 +0.26
EUR/USD 1.1317 +0.23
AUD/USD 0.7151 +0.16