Newsletter – 1st February 2019

Morning Bulletin

Yesterday

  • Having traded fairly flat for most of the day, the Euro ended up being one of the weaker performers in FX space by the close of play yesterday. The single currency was weighed down by unusually gloomy comments from ECB Member Jens Weidmann as he said he expects Germany’s economic slump to be longer than earlier thought with more bad news in the pipeline. Weidmann added that the Eurozone was likely to undershoot current inflation expectations for 2019 as a result of lower oil prices and also said the German economy was likely to grow far less than the potential rate of 1.5% in 2019.
  • Despite all the Brexit uncertainty the Pound managed to make gains of around +0.33% against the Euro, closing the day at 1.1460.
  • The US Dollar made gains of +0.27% against the Euro, with EUR/USD closing the day down at 1.1447.
  • The grim news wasn’t just limited to Weidmann’s comments for the Eurozone, as earlier in the day the Italian economy was confirmed as falling into recession with data showing GDP had declined 0.2% in the final quarter of 2019. That followed a 0.1% decline in Q3.
  • The overall Eurozone GDP print however showed growth was steady at +0.2% in the final quarter of 2019.
Overnight

  • US President Trump has reiterated the March deadline still remains for trade talks with China, however he added he plans to personally meet Chinese President Xi in February to seal ‘the biggest deal ever made’.
  • According to the Telegraph a group of top German economists have told the EU to rip up the Irish backstop and ditch their ideological demands in negotiations with the UK.
  • Japan Unemployment Rate 2.4% (2.5% Exp)
  • Australia PPI q/q 0.5% (0.6% Exp)
  • Japan Final Manufacturing PMI 50.3 (50.0 Exp)
  • China Caixin Manufacturing PMI 48.3 (49.5 Exp)
Today
  • UK Manufacturing PMI and Eurozone Inflation data headline this morning, due at 9.30am and 10.00am respectively.
  • This afternoon we have a deluge of key US jobs data at 1.30pm, with the Non-Farm Employment Change headlining.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1425 -0.22
GBP/USD 1.3094 -0.09
EUR/USD 1.1459 +0.11
AUD/USD 0.7253 -0.23

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Manufacturing PMI 53.5 54.2
10.00 EUR CPI Flash Estimate y/y 1.4% 1.6%
13.30 USD Average Hourly Earnings m/m 0.3% 0.4%
13.30 USD Non-Farm Employment Change 165K 312K
13.30 USD Unemployment Rate 3.9% 3.9%
14.30 CAD Manufacturing PMI 53.6
15.00 USD ISM Manufacturing PMI 54.1 54.1
15.00 USD Revised UoM Consumer Sentiment 90.8 90.7