Newsletter – 20th July 2017

Morning Bulletin

Yesterday

  • On what was a slow news day the Euro was one of yesterday’s worst performers. The single currency declined by around 0.30% on the day versus a good number of its major currency counterparts.
  • There was no obvious cause for this Euro weakness, perhaps simply traders/investors positioning themselves ahead of the key ECB meeting today.
  • UK PM Theresa May warned yesterday that none of her cabinet ministers was unsackable, but added the team is very much together and getting on with the task at hand.
  • Addressing the French Parliament, ECB member Villeroy said that the ECB had defeated the risk of deflation but there was still work to do in order to reach their inflation target and as a result accomodative monetary policy was still necessary.
  • Key data in the afternoon session:
    • Canadian Manufacturing Sales m/m 1.1% (0.9% Exp)
    • US Building Permits 1.25M (1.20M Exp)
    • US Housing Starts 1.22M (1.16M Exp)
  • According to a US official, officials from the UK and US will meet next Monday to begin early exploration of possible free trade agreements post-Brexit.
Overnight
  • The Bank of Japan opted to hold interest rates at -0.10%.
  • The BOJ kept their monetary policy steady; however they did slash their inflation forecasts. Up to March 2018 they cut from 1.4% to 1.1%, and then for the year after that from 1.7% to 1.5%.
  • President Trump has implored his Senate Republicans to remain in Washington until Obamacare is repealed. Senators are of course due to leave shortly for their summer break, but Trump insists they were so close to striking a deal that they should remain to see that through.
  • Australia Employment Change 14.0K (14.4K Exp)
  • Australia Unemployment Rate 5.6% (5.6% Exp)
  • Japan All Industries Activity m/m -0.9% (-0.8% Exp)
  • German PPI m/m 0.0% (-0.1% Exp)
Today
  • UK Retail Sales m/m headlines this morning at 9.30am with an expected print of +0.4%.
  • This week’s main event kicks off at 12.45pm with the highly anticipated ECB rate decision & press conference. The ECB is widely expected to keep rates on hold at 0.00%, but it is the accompanying statement and press conference that will be closely scrutinised for any changes in language or tone from the Governing Council members.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1302 -0.03
GBP/USD 1.2990 -0.24
EUR/USD 1.1508 -0.06
AUD/USD 0.7913 -0.50

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR Eurozone Current Account 23.3Bn 22.2Bn
09.30 GBP UK Retail Sales m/m 0.4% -1.2%
12.45 EUR ECB Minimum Bid Rate 0.00% 0.00%
13.30 EUR ECB Press Conference
13.30 USD Unemployment Claims 245K 247K
13.30 USD Philly Fed Manufacturing Index 23.4 27.6
15.00 EUR Eurozone Consumer Confidence -1 -1
15.00 USD CB Leading Index m/m 0.4% 0.3%