Newsletter – 19th May 2017

Morning Bulletin

Yesterday

  • Sterling enjoyed a strong Thursday morning following better-than-expected retail sales figures from the UK.
  • Retail sales m/m was expected to come in at 1.2% but the actual figure was 2.3% and sterling rallied as a result.
  • GBP/EUR opened at 1.1620 but rallied to a high of 1.1729 whereas GBP/USD opened at 1.2970 and traded just shy of 1.3050.
  • The rally was short-lived however as in the afternoon we saw both aforementioned currency pairs come off. GBP/EUR still gained on the day but closed at 1.1650 whereas sterling actually lost ground on the US dollar closing down  at 1.2941.
  • There was firm unemployment US data that helped the dollar in the form of unemployment claims which came in at 232K vs 240K expected.
  • The Philly Fed manufacturing index also came in stronger than expected at 38.8 vs 19.9 expected.
  • The Conservative Party released their manifesto for the upcoming election yesterday with the key message being to provide ‘strong and stable’ leadership through Brexit. In terms of policies, they have pledged to increased NHS spending in real terms by £8bn extra per year by 2022/2023 and to introduce means tested winter fuel payments, taking away £300 from wealthier pensioners (BBC News).
Overnight
  • New Zealand released some low impact economic data with credit card spending y/y coming in at 6.4%.
  • GBP/NZD is currently trading 1.8833 whereas GBP/AUD is at 1.7450 and AUD/USD is trading 0.7442.
Today
  • The only data of note expected today comes from Canada with CPI m/m and Core Retail Sales m/m being released at 1.30pm. Following that we have consumer confidence from Europe at 3pm but this is unlikely to have a significant effect on the markets.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1650 +0.03
GBP/USD 1.2981 +0.31
EUR/USD 1.1137 +0.33
AUD/USD 0.7439 +0.29

 

Time (GMT) Region Data Release Forecast Previous
13:30 CAD CPI m/m 0.5% 0.2%
13:30 CAD Core Retail Sales m/m 0.2% -0.1%
13:30 CAD Common CPI y/y 1.3%
13:30 CAD Median CPI y/y 1.7%
13:30 CAD Retail Sales CPI m/m 0.4% -0.6%
13:30 CAD Trimmed CPI y/y 1.4%
15:00 EUR Consumer Confidence -3 -4