Newsletter – 2 February 2017

Morning Bulletin

Yesterday

  • UK Manufacturing PMI was bang in-line with expectations at55.9. Slightly down on last month’s print of 56.1, but nonetheless still encouraging for British manufacturing. The survey also revealed that Input prices rose at their fastest pace since these surveys started some 25 years ago, led by the weakened Pound and rising commodity prices.
  • Sterling caught a bid off the back of this data and actually held it for most of the day. Closing up against all of its major counterparts, including 0.8% against the Euro at 1.1750.
  • US Data dominated the afternoon session, with US Employment Change data smashing expectations. The ADP print showed some 246,000 more people were in employment in January versus an expected rise of just 165,000. Ordinarily we would have seen serious Dollar strength off the back of this number however it appears the markets are still nervous due to President Trump’s continued impact since taking the oval office.
  • US Manufacturing also impressed a little later in the afternoon, with a PMI print of 56.0 versus an expected 55.0. The Dollar did seem to find some respite following this release, limiting its losses on the day.
Overnight

  • UK Parliament voted 498 to 114 in favour of giving Theresa May the power to trigger Article 50.
  • Overnight the US Federal Reserve opted to keep interest rates on hold at 0.75%. Whilst acknowledging improving consumer and business sentiment the overall policy statement was little changed with no further guidance for their March meeting.
  • Aussie Data: Building Approvals m/m -1.2% (-1.7% Exp); Trade Balance 3.51Bn (2.00Bn Exp).
Today
  • Following a key UK print in the form of Construction PMI this morning, the real focus of today’s trading kicks off at 12pm in what has now become known as ‘Super Thursday’. That is because the Bank of England will release their latest Inflation report, along with the official interest rate decision, accompanying votes and the Monetary Policy Statement. To top it all off we then hear from Governor Mark Carney at 12.30pm at a scheduled press conference. Could be plenty of Sterling movement’s in the day ahead.

 

MAJOR CURRENCY PAIRS
Current at time of distribution

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1736 -0.14
GBP/USD 1.2690 +0.28
EUR/USD 1.0813 +0.42
AUD/USD 0.7672 +1.18

 

ECONOMIC CALENDAR
Current at time of distribution
Time (GMT) Region Data Release Forecast Previous
09.30 GBP Construction PMI 53.9 54.2
12.00 GBP BOE Inflation Report
12.00 GBP BOE Official Bank Rate 0.25% 0.25%
12.00 GBP BOE Bank Rate Votes 0-0-9 0-0-9
12.00 GBP BOE Monetary Policy Statement
12.15 EUR ECB President Draghi Speaks
12.30 GBP BOE Governor Carney Speaks
13.30 USD Unemployment Claims 251K 259K