Newsletter – 19th April 2018

Morning Bulletin

Yesterday

  • Having lost some ground Tuesday, the Pound was one of the worst performers in FX space yesterday. Sterling was hammered following weaker than expected UK Inflation data, with the CPI y/y print declining to 2.5% in March. That was down from 2.7% in February, and represents its lowest level in a year.
  • The fall in Inflation will be music to the ears of British consumers and households, however the decline in sterling occurred as it potentially gives the Bank of England more time with regards to tightening monetary policy, albeit a rate hike in May does still appear likely.
  • The pound plummeted in the immediate aftermath of the figure being released. GBP/EUR dropped from 1.1560 to a day’s low of 1.1463, whilst GBP/USD fell from 1.4300 to a day’s low of 1.4173. Sterling failed to muster any real recovery over the course of the day.
  • Eurozone Inflation also dissapointed yesterday morning, with a year-on-year print of 1.3% falling short of the expected 1.4%, and the previous months reading of 1.4%. Weak inflation continues to be a thaw in the side of the ECB.
  • As expected the Bank of Canada opted to leave its benchmark interest rate at 1.25% yesterday afternoon. In the accompanying rate statement the BOC pointed to a likely rate rise in July, adding with inflation and wage growth trends ‘higher interest rates will be warranted over time’.
Overnight

  • US President Donald Trump and Japanese PM Shinzo Abe have agreed to intensify trade talks between the two nations with a view to future free, fair and reciprocal trade deals.
  • New Zealand CPI q/q 0.5% (0.4% Exp)
  • Australia Employment Change 4,900 (20,300 Exp)
  • Australia Unemployment Rate 5.5% as expected
Today
  • Relatively quiet on the data front today. UK Retail Sales headlines at 9.30am this morning.
  • This afternoon there are a couple of medium impact US data releases along with US Federal Reserve members due to speak.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1464 -0.08
GBP/USD 1.4198 -0.02
EUR/USD 1.2386 +0.10
AUD/USD 0.7799 +0.23

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Retail Sales m/m -0.5% 0.8%
13.00 USD Fed Member Brainard Speaks
13.30 USD Philly Fed Manufacturing Index 20.8 22.3
13.30 USD Unemployment Claims 230K 233K
14.30 USD Fed Member Quarles Speaks
17.30 GBP BOE Member Cunliffe Speaks