Newsletter – 1st May 2018

Morning Bulletin

Yesterday

  • There was very little in the way of high impact data released yesterday.
  • The morning session included some European data:
    • Eurozone M3 Money Supply y/y 3.7% (4.1% Exp)
    • German Prelim CPI m/m 0.0% (-0.1% Exp)
    • Italian Prelim CPI m/m 0.1% (0.2% Exp)
  • Following the resignation of Amber Rudd, UK PM Theresa May has named Sajid Javid as her new Home Secretary. Whilst he campaigned to Remain in the EU referendum, Javid has since come out to back Brexit and supports leaving the customs union. Amber Rudd was of course a key pro-European Union voice within the cabinet and a key ally of the PM on Brexit matters.
  • In contrast to a great deal of recent negativity surrounding the Irish Border issue, speaking yesterday the EU’s Chief negotiator Barnier said he was confident that between the UK and EU the right solution could be found to avoid a hard border between Ireland and Northern Ireland.
  • Moves in FX space were fairly limited yesterday but Sterling did manage to stop the recent decline and ended the day slightly positive against most of its major counterparts. Having traded as low as 1.1325 the Pound edged up to the 1.1400 handle versus the Euro.
  • There were a raft of US data releases yesterday afternoon:
    • Core PCE Price Index m/m 0.2% as expected
    • Personal Spending m/m 0.4% as expected
    • Chicago PMI 57.6 (58.2 Exp)
    • Pending Home Sales m/m 0.4% (0.6% Exp)
  • The House of Lords have scuppered the UK Governments plans to simply cut ties and walk away from the European Union in the event of a ‘No-deal’ scenario. Peers voted down the motion 335 to 244 to ensure that Parliament gets their say on the next step should the UK’s proposals be rejected by Brussels.
Overnight

  • The Reserve Bank of Australia kept their benchmark interest rate on hold at 1.50% this morning as widely expected. That is the 19th consecutive month that rates have been held at an historic low.
  • US President Trump has decided to extend the 1st May deadline for Steel and aluminium tariffs for US allies. The President has postponed any decision regarding the EU, Canada and Mexico for 30 days according to the White House.
  • Japan Final Manufacturing PMI 53.8 (53.3 Exp)
  • New Zealand Building Consents m/m 14.7% (6.4% Exp)
Today
  • Germany, France, Italy and Switzerland are enjoying a bank holiday today.
  • Key data this morning will be out of the UK with Manufacturing PMI at 9.30am.
  • Good number of releases out of North America this afternoon. Canadian GDP at 1.30pm and US ISM Manufacturing PMI at 3pm are the key prints.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1402 +0.04
GBP/USD 1.3753 -0.01
EUR/USD 1.2061 -0.14
AUD/USD 0.7521 -0.08

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Manufacturing PMI 54.8 55.1
09.30 GBP Net Lending to Individuals m/m 4.9Bn 5.4Bn
10.20 AUD RBA Gov Lowe Speaks
13.30 CAD GDP m/m 0.3% -0.1%
14.30 CAD Manufacturing PMI 55.7
14.45 USD Final Manufacturing PMI 56.5 56.5
15.00 USD ISM Manufacturing PMI 58.4 59.3
15.00 USD Construction Spending m/m 0.5% 0.1%
TBC NZD Global Dairy Trade Price Index 2.7%