Newsletter – 18th July 2017

Morning Bulletin

Yesterday

  • There was very little key data released yesterday and Sterling appeared to be the biggest loser as a result. Perhaps further signs of investors showing their lack of confidence in the UK as the Brexit talks recommenced in Brussels.
  • Sterling closed European trading down around 0.20% to 0.30% against most of its major counterparts. The Pound had opened the day pushing the 1.3100 handle versus the Dollar, and was comfortably in the mid 1.1400’s versus the Euro, however by 6pm it was trading down at 1.3055 and 1.1382 respectively.
  • Eurozone CPI y/y came in as expected at +1.3%.
  • The EY Item club slashed UK growth forecasts for 2017 to+1.5%, down from +1.8% previously.
  • Interestingly however the EY Item club revised growth forecasts for 2018 and 2019 up to +1.3% and +1.8%, from a previous +1.2% and +1.5% respectively. The report was based on an assumption of a transitional agreement between the UK and Europe being struck and also the prospect of a free trade deal thereafter.
  • US Empire State Manufacturing Index 9.8 (15.2 Exp).
Overnight

  • New Zealand CPI q/q 0.0% (0.2% Exp)
  • The minutes from the latest Reserve Bank of Australia meeting revealed a rather upbeat picture with the RBA signalling they expect a positive second quarter.
  • The Aussie Dollar rallied hard in FX space following the minutes, with AUD/USD hitting its highest level since May 2015 at 0.7923.
  • The US Dollar took another hit overnight as the Senate Healthcare bill looks increasingly likely to collapse as two more Republican Senators declared opposition to the bill.
  • In FX space EUR/USD rallied to a new 14 month high of 1.1537, whilst GBP/USD briefly broke the 1.3100 handle following this news.
Today
  • Raft of UK inflation measures will take centre stage this morning at 9.30am. Key amongst them will be the CPI y/y print which is expected to come in at 2.9%.
  • We will also hear from BOE Governor Mark Carney later this afternoon as he unveils the new £10 note featuring Jane Austen.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1375 +0.04
GBP/USD 1.3099 +0.36
EUR/USD 1.1512 +0.30
AUD/USD 0.7912 +1.49

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP CPI y/y 2.9% 2.9%
09.30 GBP PPI Input m/m -0.8% -1.3%
09.30 GBP RPI y/y 3.6% 3.7%
10.00 EUR German ZEW Economic Sentiment 17.6 18.6
13.30 USD Import Prices m/m -0.2% -0.3%
14.30 GBP BOE Gov Carney Speaks
15.00 USD NAHB Housing Market Index 67 67
TBC NZD Global Dairy Trade Index -0.4%