Newsletter – 20th April 2017

Morning Bulletin

Yesterday

  • Sterling failed to continue the momentum it had gained from Tuesday’s election announcement yesterday as GBP/USD traded below 1.2850 for the duration of the day and GBP/EUR traded below 1.20.
  • A small pullback could not be written off going into yesterday’s session especially having seen such big moves by sterling the previous day and that is exactly what we saw.
  • For GBP/EUR to move higher we need to see it breach the 1.20 mark and maintain that position – it touched that level on Tuesday before pulling back to the current area of around the 1.1930 mark.
  • In the cable market, 1.29 was the high of Tuesday and in a similar fashion to GBP/EUR, the market has pulled back to the mid-1.28s. 1.29 is a significant level and it will be interesting to see if sterling can break above it or whether the market will settle in the recently more familiar 1.22 – 1.27 range.
  • As expected UK PM May won parliamentary approval for a snap general election on June 8th with only 13 MPs voting against.
  • May also said yesterday that the UK should be able to complete Brexit negotiations within two years and also ruled out a second referendum on EU membership.
  • Final CPI from the Eurozone came in at 1.5% as expected.

Overnight

  • Last night we saw New Zealand CPI q/q come in slightly better than expected at 1% vs 0.8%.
  • GBP/NZD is currently trading 1.8250 whereas GBP/AUD is at 1.7040.

Today

  • Today we have Philly Fed Manufacturing Index data along with unemployment data from the US at 1.30pm.
  • Bank of England Governor Mark Carney is in Washington DC today where he participate as part of a panel in a Bank of France event after first speaking at the International Finance Policy Summit at 4.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1926 -0.07
GBP/USD 1.2826 +0.38
EUR/USD 1.0756 +0.43
AUD/USD 0.7528 +0.44

 

Time (GMT) Region Data Release Forecast Previous
13:30 USD Philly Fed Manufacturing Index 25.6 32.8
13:30 USD Unemployment Claims 241K 234K
16:30 GBP BOE Gov. Carney Speaks
18:15 USD Treasury Sec Mnuchin Speaks