Newsletter – 22nd June 2018

Morning Bulletin

Yesterday

  • The Bank of England’s monetary policy meeting dominated proceedings yesterday and it didn’t disappoint on the whole. Whilst the BOE kept rates on hold at 0.50% as expected, the committee voted 6-3 in favour of the motion rather than the 7-2 vote expected.
  • This time around the BOE’s Chief Economist Andy Haldane unexpectedly voted for a rate rise, joining Michael Saunders and Ian McCafferty. Haldane joined the voting dissenters as he believed recent pay deals and labour demand could push wages up faster than expected.
  • Having been on  the back-foot all morning in the lead up to the BOE Sterling rallied in FX space following the decision as this now puts a rate hike in August firmly back on the table.
  • GBP/EUR had traded as low as 1.1361 yesterday morning, but closed the day at 1.1412.
  • Whilst GBP/USD had an even more significant move, having traded as low as 1.3102 Cable rallied to close the day at 1.3247, up +0.60% on the day.
  • UK Public Sector Net Borrowing (May) 3.4Bn (5.1Bn Exp)
  • The Swiss National Bank opted to keep their benchmark interest rate on hold at -0.75%.
  • The US Dollar was also dented yesterday afternoon following a weaker than expected manufacturing print. The Philly Fed Manufacturing Index dropped to 19.9 from a previous reading of 34.4; 28.9 had been expected. Whilst economists had been optimistic about US Manufacturing, the risk of a trade war with China appears to be having an impact.
  • US Unemployment Claims 218K (220K Exp)
Overnight

  • According to a German Industry group the UK is currently heading towards a disastrous exit from the European Union which will have negative impacts on its own economy and those of its partners in the Bloc. The German BDI added that to avoid this disaster scenario the UK has to remain within the single market and customs union, two major redlines with many Tory MP’s and Brexit voters alike.
  • Japan Flash Manufacturing PMI 53.1 (52.6 Exp)
  • New Zealand Visitor Arrivals m/m 2.7% (-1.0% previous)
  • French Flash Manufacturing PMI 53.1 (54.0 Exp)
  • French Flash Services PMI 56.4 (54.3 Exp)
Today
  • Couple of Eurozone prints due at 9am this morning, with Manufacturing and Services PMI.
  • This afternoon Canadian Inflation and Retail Sales data will be in focus.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1408 -0.02
GBP/USD 1.3293 +0.42
EUR/USD 1.1652 +0.43
AUD/USD 0.7414 +0.54

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR Flash Manufacturing PMI 55.0 55.5
09.00 EUR Flash Services PMI 53.7 53.8
12.00 GBP BOE Quarterly Bulletin
13.30 CAD CPI m/m 0.4% 0.3%
13.30 CAD Core Retail Sales m/m 0.6% -0.2%
14.00 EUR Belgian NBB Business Climate 0.0 0.2
14.45 USD Flash Manufacturing PMI 56.3 56.4
14.45 USD Flash Services PMI 56.8 56.8