Newsletter – 23rd August 2018

Morning Bulletin

Yesterday

  • Incredibly sparse on the data front yesterday.
  • Perhaps unsurprisingly moves in FX space were fairly limited, with the US Dollar one of the weaker performers on the day.
  • GBP/USD did briefly rally to a 2-week high of 1.2936, before closing the day around 1.2900.
  • Similarly EUR/USD hit a 2-week high of 1.1622 before ending the day around 1.1600.
  • Canada Core Retail Sales m/m -0.1% as expected.
  • US Existing Home Sales 5.34M (5.40M Exp)
Overnight

  • Minutes released last night from the US Federal Reserve’s August meeting revealed the Central Bank is ready to hike rates again provided the economy remains on track. A good number of the committee suggested that if the economic data continued to support their current outlook then further rises would be appropriate although they would be at a gradual pace. Of course just this week President Trump bemoaned the Fed for hiking rates.
  • Up until recently the US Fed hadn’t intimated too much concern about President Trump’s aggressive trade policies, but this time around the minutes showed there were growing worries about the impact of Trumps wide-sweeping tariffs and the implications for the US if their trading partners were to retaliate.
  • The Aussie Dollar is on the back-foot in FX space this morning following political turmoil. Aussie PM Malcolm Turnbull just about hung on to power in a leadership vote on Tuesday, but with his Senior Ministers deserting the PM said he would hold a second leadership this Friday but only if he received a letter signed off by the majority of the ruling liberal party.
  • According to officials from both sides, the US and Mexico might resolve all of their NAFTA issues with a completed deal possible this week.
  • Japan Flash Manufacturing PMI 52.5 (52.4 Exp)
  • French Flash Manufacturing PMI 53.7 (53.5 Exp)
  • French Flash Services PMI 55.7 (55.1 Exp)
Today
  • Eurozone Flash PMI readings will be the focus of this morning.
  • Minutes from the ECB’s most recent meeting will then be scrutinised when released just after midday.
  • This afternoon there will be some fairly low key US data releases.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1135 0.00
GBP/USD 1.2883 -0.21
EUR/USD 1.1566 -0.26
AUD/USD 0.7290 -0.82

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR Eurozone Flash Manufacturing PMI 55.1 55.1
09.00 EUR Eurozone Flash Services PMI 54.4 54.2
11.00 GBP CBI Realised Sales 13 20
12.30 EUR ECB Monetary Policy Meeting Accounts
13.30 USD Unemployment Claims 215K 212K
14.00 USD HPI m/m 0.3% 0.2%
14.45 USD Flash Manufacturing PMI 55.1 55.3
14.45 USD Flash Services PMI 55.9 56.0
15.00 EUR Consumer Confidence -1 -1
15.00 USD New Home Sales 651K 631K