Newsletter – 1st August 2017

Morning Bulletin

Yesterday

  • Trading proved fairly muted yesterday morning with moves in FX space fairly limited.
  • The Euro did find some brief strength following the release of inflation data, with a Eurozone CPI print of 1.3% y/y. Whilst this was in-line with expectations there was a slight beat on the Core CPI print (Measure Excluding Food, Energy, tobacco and alcohol) of 1.2% vs 1.1% Exp.
  • Speaking yesterday morning, A spokesman for UK PM Theresa May stated that the free movement of EU citizens to Britain would come to an end in March 2019.
  • Despite the obvious ramifications of such a statement the Pound was in fact trading solidly yesterday morning and into the afternoon.
  • UK Net Lending to Individuals m/m 5.6Bn (4.9Bn Exp).
  • Just the two US Data releases yesterday afternoon and they were very contrasting with Chicago PMI falling well below expectations at 58.9 (60.8 Exp), whilst Pending Home Sales m/m was much better than expected at 1.5% (0.9% Exp).
  • Despite any one obvious cause or trigger, the US Dollar got hammered yesterday afternoon and into the close of European trading. Arguably it was just a combination of economic and political factors which have been the root cause of Dollar weakness of late.
  • As the Dollar Index plummeted to fresh 13 month lows, we saw GBP/USD hit a fresh 11 month high of 1.3221, whilst EUR/USD surged to a 32 month high of 1.1845.
Overnight

  • The Reserve Bank of Australia (RBA) held interest rates at1.50% as expected overnight.
  • Speaking afterwards RBA Governor Lowe stated that the Aussie Dollars recent appreciation was hurting job creation and economic activity, and that the strengthening Dollar would lead to a slower pick-up in economic activity and inflation than they had currently forecast.
  • US President Trump has fired his Communications Director Anthony Scaramucci after just 11 days in the job.
  • China Caixin Manufacturing PMI 51.1 (50.5 Exp)
  • Spanish Manufacturing PMI 54.0 (54.9 Exp)
Today
  • There a number of key prints that could cause movement over the course of today.
  • This morning UK Manufacturing PMI will be key at 9.30am (54.4 Exp) followed closely by Eurozone GDP data (0.6% Exp) at 10.00am.
  • This afternoon we look to the US and the ISM Manufacturing PMI release at 3pm (56.4 Exp).
  • Worth noting that today is a Swiss National Bank Holiday.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1182 +0.22
GBP/USD 1.3214 +0.03
EUR/USD 1.1817 -0.20
AUD/USD 0.8001 -0.01

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP UK Manufacturing PMI 54.4 54.3
10.00 EUR Prelim Flash GDP q/q 0.6% 0.6%
13.30 USD Core PCE Price Index m/m 0.1% 0.1%
13.30 USD Personal Spending m/m 0.1% 0.1%
15.00 USD ISM Manufacturing PMI 56.4 57.8
TBC NZD GDT Price Index 0.2%
23.45 NZD Employment Change q/q 0.7% 1.2%
23.45 NZD Unemployment Rate 4.8% 4.9%