Newsletter – 19th July 2018

Morning Bulletin

Yesterday

  • Sterling endured another torrid day in FX space yesterday having already been under pressure this week following the political turmoil.
  • The Pound was sold off aggressively yesterday morning following a weaker than expected inflation print. The CPI y/y figure of 2.4% was in-line with last month but down from the 2.6% expected and may have eased the pressure on the Bank of England to hike rates in August. Summer sales in clothing were a big contributor to inflation easing below expectations.
  • The Pound dropped to a 4-month low of 1.1193 against the Euro and it’s lowest level since September 2017 against the US Dollar at 1.3010.
  • Eurozone CPI y/y 2.0% as expected.
  • According to the Irish foreign minister the European Union will only negotiate with the UK based on the Government’s white paper and will not focus on any subsequent amendments made in parliament.
  • US Building Permits 1.27M (1.33M Exp)
  • US Housing Starts 1.17M (1.32M Exp)
Overnight

  • President Trump continued to backtrack overnight over his much criticised meeting with Putin, this time stating that President Putin was personally responsible for Russia’s meddling in the 2016 US Presidential election. However as a slight caveat he added Putin was only responsible in that he was the leader of Russia and as such responsibility fell on his shoulders.
  • President Trump also said European Leaders would be visting Washington next week with a view to hammering out a deal largely focused on car tariffs. Amongst the visiting delegates will be European commission President Jean-Claude Juncker.
  • According to CITY AM the EU 27 negotiators and MEP’s are considering an extension to article 50 over fears that the two parties could be heading towards no deal and a cliff-edge Brexit.
  • Australia Employment Change 50.9K (16.7K Exp)
  • Australia Unemployment Rate 5.4% as expected
  • Japan Trade Balance 0.07Tn (0.15Tn Exp)
  • Swiss Trade Balance 2.59Bn (3.22Bn Exp)
Today
  • UK Retail Sales headlines at 9.30am this morning. Having endured a torrid week so far a better than expected print could really aid the weak Pound.
  • This afternoon US Unemployment Claims and Philly Fed Manufacturing are in focus.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1215 -0.12
GBP/USD 1.3025 -0.32
EUR/USD 1.1611 -0.22
AUD/USD 0.7378 -0.26

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Retail Sales m/m 0.1% 1.3%
13.30 CAD ADP Non-farm Employment Change 2.9K
13.30 USD Philly Fed Manufacturing Index 21.6 19.9
13.30 USD Unemployment Claims 220K 214K
14.00 USD Fed Member Quarles Speaks
15.00 USD CB Leading Index m/m 0.4% 0.2%