Newsletter – 20th February 2019

Morning Bulletin

Yesterday

  • UK jobs data was firmly in focus yesterday morning with the headline Average Earnings Index 3m/y coming in slightly shy of expectations at 3.4% (3.5% Exp), but that nevertheless kept wage growth close to a decade’s high in the 3 months to December. The UK’s overall Unemployment Rate also held steady at 4.0%, with some 167,000 more people in work in the three months to December. The Number of people claiming unemployment related benefits did however rise by 14,200 against an expected 12,300.
  • The Pound traded fairly flat following the data release.
  • There was also some key Eurozone data released yesterday morning with the Eurozone’s current account (Imports v Exports) showing a surplus of 16.2Bn in December. That was quite a way short of the 21.4Bn forecast and down from 22.6Bn in November.
  • German ZEW Economic Sentiment showed a lesser decline than expected with a reading of -13.4 (-14.1 was expected) however that is still of course massively in pessimistic territory as the respondents of the survey don’t see any rapid recovery in the German economy.
  • Despite the slightly tame jobs data in the morning Sterling actually ended up being one of the strongest performers in FX space yesterday afternoon, with the Pound rallying aggressively from around Midday all the way into the close.
  • Oddly there were no obvious reasons for the Pound to rally, however as a result GBP/EUR rallied to a February high of 1.1513, up some +0.75% on the day. GBP/USD enjoyed even more success, closing the day up +1.11% at 1.3061, its highest level since early February.
  • According to the evening standard up to three Conservative MP’s are preparing to jump ship and join the newly formed Independent Group of MP’s.
Overnight

  • US President Donald Trump once again said talks with China are going very well despite their complex nature. He also once again indicated the 1st March deadline for raising tariffs could be extended.
  • Ahead of their meeting in Brussels today, Jean-Claude Juncker said overnight that he does not expect any breakthrough in talks with Theresa May.
  • An 8th Labour MP has now defected to the newly formed Independent group overnight. Joan Ryan is the latest MP to defect sighting a culture of anti-Jewish racism.
  • Australia Wage Price Index q/q 0.5% (0.6% Exp)
  • Japan Trade Balance -0.37Tn (0.17Tn Exp)
  • German PPI m/m +0.4% (-0.25 Exp)
Today
  • Very little in the way of key economic data to be released today.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1482 -0.30
GBP/USD 1.3027 -0.27
EUR/USD 1.1345 +0.04
AUD/USD 0.7156 -0.10

 

Time (GMT) Region Data Release Forecast Previous
11.00 GBP CBI Industrial Order Expectations -5 -1
15.00 EUR Consumer Confidence -8
15.30 AUD CB Leading Index m/m -0.1%
19.00 USD Federal Reserve Meeting Minutes