Newsletter –1st July 2019

Morning Bulletin

Friday

  • Solid if not spectacular UK economic data released Friday morning. The Final GDP q/q reading for Q1 of 2019 came in as expected at 0.5%. The UK’s current account deficit widened further in the first quarter to -30.0Bn, that was however better than the -32.0Bn expected.
  • The Eurozone’s inflationary problems continued in June, albeit it remained steady and was in-line with May’s reading and expectations at 1.2%.
  • Canada GDP m/m 0.3% (0.2% Exp)
  • US Personal Spending m/m 0.4% (0.5% Exp)
  • US Fed Member Robert Kaplan said he could not support a US rate cut at this stage whilst speaking on Friday. Kaplan added that for him to be able to support a cut he would need to see more material deterioration in the US economic outlook.
  • The US Chicago PMI reading fell into contractionary territory for the first time in two years in June. The shock PMI print of 49.7 was markedly short of the 54.0 expected and the 54.2 recorded in May.
  • US Consumer Confidence declined by slightly less than initially reported in June. The revised reading of 98.2 is still down by 1.8% from the previous month but was slightly better than the 97.9 originally thought.
Over The Weekend

  • The enduring image of the weekend has to be that of US President Donald Trump becoming the fisrt sitting US President to set foot on North Korean soil as he briefly met and shared a handshake with North Korean Leader Kim Jong Un.
  • Perhaps of more significance to the present however, speaking over the weekend President Trump said trade talks with China were back on track and that a round of new proposed tariffs were on hold. In order to get the two superpowers back to the negotiating table, alongisde the postponing of new tariffs the US also agreed to ease restrictions on Chinese tech giant Huawei, whilst China agreed to make unspecified new purchases of US farm products.
  • China Manufacturing PMI 49.4 (49.5 Exp)
  • China Non-Manufacturing PMI 54.2 as expected
  • Japan Final Manufacturing PMI 49.3 (49.5 Exp)
  • Swiss Retail Sales y/y -1.7% (+0.6% Exp)
Today
  • Unusually busy data calendar for a Monday with manufacturing prints in focus.
  • UK and Eurozone data due from 9am this morning.
  • Attention switches to the US at 3pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1186 +0.33
GBP/USD 1.2662 -0.25
EUR/USD 1.1319 -0.42
AUD/USD 0.6997 -0.35

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR Final Manufacturing PMI 47.8 47.8
09.00 EUR M3 Money Supply y/y 4.6% 4.7%
09.30 GBP Manufacturing PMI 49.5 49.4
09.30 GBP M4 Money Supply m/m 0.6% 0.9%
10.00 EUR Eurozone Unemployment Rate 7.6% 7.6%
14.45 USD Final Manufacturing PMI 50.1 50.1
15.00 USD ISM Manufacturing PMI 51.3 52.1
15.00 USD Construction Spending m/m 0.1% 0.0%