Newsletter – 22nd September 2017

Morning Bulletin

Yesterday

  • Sterling performed solidly yesterday, underpinned by a better than expected UK Public Net Sector Borrowing figure. Net borrowing stood at £5.1Bn for August, lower than the forecasted £6.5Bn, representing the lowest borrowing figure for the month of August since 2007. The improvement was attributed to massive rise in VAT receipts.
  • Speaking yesterday, EU Brexit negotiator Verhofstadt said he hoped Theresa May’s speech in Florence today could provide a break through in Brexit talks, as so far he had not seen enough progress.
  • There was raft of data out of North America yesterday afternoon:
    • Canadian Wholesale Sales m/m 1.5% (-0.7% Exp)
    • US Unemployment Claims 259K (302K Exp)
    • US Philly Fed Manufacturing Index 23.8 (17.3 Exp)
    • US HPI m/m 0.2% (0.4% Exp)
  • Sterling took a further leg higher into the afternoon as sources reported UK PM Theresa May is prepared to offer the EU €20Bn during the two year transition period in order to secure access to the single market and some form of customs union.
  • The Latest FGW German Election Poll:
    • Chancellor Merkel’s Conservatives – 36%
    • Social Democrats – 21%
    • Far-Right AFD – 11%
    • Pro-Business FDP – 10%
Overnight

  • French Flash Manufacturing PMI 56.0 (55.6 Exp)
  • French Flash Services PMI 57.1 (54.8 Exp)
  • German Flash Manufacturing PMI 60.6 (59.0 Exp)
  • German Flash Services PMI 55.6 (53.8 Exp)
  • Credit ratings agency S&P don’t expect the US Fed to hike rates again in 2017, but do still expect 3 hikes in 2018.
Today
  • UK PM Theresa May is due to speak about the UK’s post-Brexit relationship with the EU in Florence. The exact time is yet to be confirmed.
  • Canadian CPI and Retail Sales data will be our key data this afternoon.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1330 -0.37
GBP/USD 1.3586 +0.05
EUR/USD 1.1994 +0.45
AUD/USD 0.7949 +0.24

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR ECB President Draghi Speaks
09.00 EUR Eurozone Flash Manufacturing PMI 57.2 57.4
09.00 EUR Eurozone Flash Services PMI 54.7 54.7
TBC GBP PM Theresa May Speaks
11.00 GBP CBI Industrial Order Expectations 13 13
13.30 CAD CPI m/m 0.2% 0.0%
13.30 CAD Core Retail Sales m/m 0.4% 0.7%
14.00 EUR Belgian NBB Business Climate -2.0 -2.1
14.45 USD Flash Manufacturing PMI 52.9 52.8
14.45 USD Flash Services PMI 55.8 56.0