Newsletter – 1st November 2018

Morning Bulletin

Yesterday

  • Sterling was one of the best performers in FX space yesterday, albeit it took a strong rally during the afternoon for that to be the case. The Pound was buoyed by comments from Brexit Secretary Dominic Raab who said a Brexit deal should be finished by the 21st November, stating that an end to negotiations was ‘firmly in sight’.
  • Having opened the morning around the 1.1200 handle the Pound rallied to as high as 1.1306 during the afternoon against the Euro, a 5-day high.
  • Gains against the US Dollar were a little harder to come by, with the Pound closing the afternoon up at 1.2780 having started the morning at around 1.2730. There was very brief spike up to 1.2830 however.
  • Elsewhere yesterday:
  • Eurozone Inflation was in-line with expectations, with the CPI y/y print of 2.2%.
  • Likewise the Eurozone Unemployment Rate came in at 8.1% as expected.
  • Canadian GDP m/m was up +0.1% in August.
  • The US economy continues to impress, this time with the ADP print showing some 227,000 new private-sector jobs were created in October. That far exceeded the 188,000 expected.
Overnight

  • The Pound has rallied again this morning as reports suggest UK PM Theresa May has agreed a tentative deal with the EU on Financial Services post-Brexit. Financial services are of course crucial to the UK economy and the reported agreement would allow UK companies continued access to European markets as long as UK financial regulation remains largely inline with the EU.
  • The Pound is currently up +0.54% against the Euro at 1.1350, whilst against the US Dollar it is trading at 1.2906 (+1.11%).
  • Australia Trade Balance 3.02Bn (1.71Bn Exp)
  • Australia Import Prices q/q 1.9% (1.2% Exp)
  • The Aussie Dollar is one of the best performing currencies alongside the Pound this morning following the above impressive economic prints.
  • UK Nationwide House Price Index m/m 0.0% (0.2% Exp)
Today
  • Raft of economic data due over the course of the day however the Bank of England’s monetary policy meeting, rate decision and inflation report will take centre stage from 12pm.
  • Please be aware today is a bank holiday for a number of European countries including France, Italy and Poland.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1351 +0.53
GBP/USD 1.2909 +1.13
EUR/USD 1.1375 +0.56
AUD/USD 0.7152 +1.14

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Manufacturing PMI 53.0 53.8
11.30 USD Challenger Job Cuts y/y 70.9%
12.00 GBP BOE Inflation Report
12.00 GBP BOE Official Bank Rate 0.75% 0.75%
12.00 GBP BOE Bank Rate Votes 0-0-9 0-0-9
12.00 GBP BOE Monetary Policy Statement
12.30 GBP BOE Gov Carney Speaks
12.30 USD Unemployment Claims 213K 215K
13.30 CAD Manufacturing PMI
14.00 USD ISM Manufacturing PMI 59.0 59.8
14.00 USD Construction Spending m/m 0.2% 0.1%