Newsletter – 19th March 2018

Morning Bulletin

Friday

  • Weak inflation continues to be a thaw in the side of the ECB according to Friday’s CPI print. The year-on-year figure showed inflation at 1.1%, down from a prior 1.2% and still a long long way from the ECB’s 2% target.
  • According to UK Brexit Secretary David Davis a deal on a post-Brexit transitional period is ‘within reach’ and could be finalised ahead of next week’s European Council Summit. Suggestions on agreement on a transitional period have bolstered the Pound of late.
  • There was a raft of US data released Friday afternoon, but a number of key prints saw the US Dollar rally aggressively in FX space including:
    • JOLTS Job Openings 6.31M (5.91M Exp)
    • Industrial Production m/m 1.1% (0.3% Exp)
    • Prelim UoM Consumer Sentiment 102.0 (99.2 Exp)
  • Remarkably the Consumer Sentiment print was a 14-year high, boosted by the recent tax cuts. Whilst the JOLTS job openings figure was a record high at 6.31M.
  • Those coupled with the much better than expected Industrial Prodcution print ensured a solid afternoon for the US Dollar in FX space.
  • The Dollar may also have been aided by an apparent truce between President Trump and his White House Chief of Staff John Kelly. That truce might temporarily at least halt the recent outward flow of key staff.
  • Speaking Friday German Chancellor Angela Merkel said the planned US import tariffs were directly at odds with the EU principles and that the EU and US should engage in talks on the trade conflict.
Overnight

  • Russian President Vladimir Putin has been re-elected to serve another 6 years in office. Putin won 73.9% of the vote, with an overall voter turnout of 60%.
  • Japan Trade Balance -0.20Tn (-0.10Tn Exp)
  • UK Rightmove HPI m/m 1.5% (0.8% Previous)
Today
  • Could be a quiet day ahead with very little economic data set for release.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1361 +0.15
GBP/USD 1.3948 +0.02
EUR/USD 1.2275 -0.10
AUD/USD 0.7697 -0.14

 

Time (GMT) Region Data Release Forecast Previous
10.00 EUR Italian Trade Balance 4.87Bn 5.25Bn
10.00 EUR Eurozone Trade Balance 22.6Bn 23.8Bn
11.00 EUR German Buba Monthly Report
13.40 USD Fed Member Bostic Speaks
14.30 AUD CB Leading Index m/m -0.3%
21.00 NZD Westpac Consumer Sentiment 107.4