Newsletter – 22nd May 2017

Morning Bulletin

Friday

  • There was no key data released Friday morning. There were however some positive numbers out of the Eurozone with German PPI m/m up 0.4% (0.2% Exp) and the Eurozone Current Account surplus also greater than expected at 34.1Bn (32.3Bn Exp).
  • The Euro continued its recent surge on Friday, gaining ground once again on most of its major currency counterparts. Most notably the Euro hit yet another fresh 2017 high against the US Dollar in the afternoon, reaching a peak of 1.1211.
  • There was some positive news for the UK on Friday with a much better than expected ‘CBI Industrial Orders Expectations’ print of 9 for the month of May (4 Exp). That print was the highest level since February 2015; a score above 0 represents increasing order volumes are expected and the index is produced from a survey of 550 manufacturers.
  • Sterling once again surged through the 1.3000 handle against the US Dollar during Friday’s trading, closing the day just shy of 1.3040.
  • Speaking Friday morning German Chancellor Merkel reiterated her stance that Brexit would come with a cost to the UK, however she also said the UK would be treated fairly.
  • With such a sparse calendar, it was Canadian data that dominated Friday afternoon, but the two key figures ultimately disappointed which saw the Canadian Dollar weaken off into the close of the day’s trading:
    • CPI m/m 0.4% (0.5% Exp)
    • Core Retail Sales m/m -0.2% (+0.2% Exp)
  • Speaking Friday afternoon US Fed member Bullard said the market’s reaction to the Fed’s March rate hike has been the opposite to what would typically be expected, suggesting this could mean the current rate path was overly aggressive. Bullard did however add that he was still open to another hike in June, but disagrees with the view of steadily raising rates thereafter.
Over The Weekend

  • Sterling currency pairs are on the defensive this morning, following commentary from Brexit Secretary David Davis over the weekend. Mr Davis warned that the UK would quit negotiations/talks should the EU demand a settlement figure as high as 100bn Euros.
  • UK ELECTIONS: Latest Survation/GMB Poll: Tories (43%), Labour (34%), Lib Dem (8%).
  • UK Rightmove House Price Index m/m 1.2% (1.1% Previously).
  • Japan Trade Balance 0.10 Trillion (0.25 Trillion Exp).
Today

  • Very light data calendar today with no key economic data set for release.
  • We do have a couple of US Federal Reserve Members due to speak later this afternoon.
  • Worth noting it is a bank holiday in Canada today; ‘Victoria Day’.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1614 -0.08
GBP/USD 1.2979 -0.42
EUR/USD 1.1171 -0.32
AUD/USD 0.7457 +0.01

 

Time (GMT) Region Data Release Forecast Previous
11.00 EUR German Buba Monthly Report
14.00 CNY CB Leading Index m/m 0.9%
15.00 USD US Fed Member Harker Speaks
15.30 AUD CB Leading Index m/m 0.4%
15.30 USD US Fed Member Kashkari Speaks
18.30 AUD RBA Assist Gov Debelle Speaks
19.00 GBP Prime Minister May Speaks