Newsletter – 22nd March 2018

Morning Bulletin

Yesterday

  • UK average earnings are growing at the fastest rate in over two years as the figures for the three months up to January showed an increase of 2.8% over the same three months of 2017. This is the biggest increase since September 2015. Excluding bonuses, earnings were 2.6% higher.
  • With annual inflation printing 2.7% it suggests that the squeeze on households spending power in the UK is at least easing.
  • The unemployment rate fell to 4.3% from 4.4% but the claimant count increased to 9.2k whereas it was expected to fall by 3.1K.
  • Sterling posted gains on the US dollar and the euro following the earnings data.
    • GBP/EUR opened at 1.1430 and closed at 1.1456 (+0.22%) after trading a high of 1.1482.
    • GBP/USD rallied by over 1% after opening at 1.3997 and closing near the high of the day at 1.4139.
  • As expected the FOMC raised the federal funds rate to <1.75% from <1.5%.
  • US President Trump is set to announce anti-China tariffs today in an attempt to crack down on intellectual property theft by the Chinese.
Overnight
  • The RBNZ kept rates in New Zealand at 1.75%.
  • Australian employment change came in at 17.5k vs 19.8K expected and the unemployment rate came in at 5.6% vs 5.5%.
Today
  • Eurozone flash manufacturing PMI came in worse than expected at 56.6 vs 58.1 and flash servies PMI also disappointed at 55 vs 56.
  • UK retail sales came in much better than expected at 0.6% vs 0.4%.
  • We hear from the Bank of England at 12pm where the MPC will likely announce an unchanged rate. The MPC votes are expected to be 9 in favour of keeping rates unchanged.
  • At 12.30pm we expect unemployment claims from the US.
Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1473 +0.15
GBP/USD 1.4165 +0.19
EUR/USD 1.2344 +0.06
AUD/USD 0.7732 -0.42

 

Time (GMT) Region Data Release Forecast Previous
12:00 GBP MPC Official Bank Rate Votes 0-0-9 0-0-9
12:00 GBP Monetary Policy Summary
12:00 GBP Official Bank Rate 0.50% 0.50%
12:00 GBP Asset Purchase Facility 435B 435B
12:00 GBP MPC Asset Purchase Facility 0-0-9 0-0-9
12:30 USD Unemployment Claims 225K 226K