Newsletter – 23rd August 2019

Morning Bulletin

Yesterday

  • Sterling was one of the strongest performers in FX space yesterday, not a sentence that has been uttered much of late.
  • The Pound rallied aggressively following comments from French President Emmanuel Macron which appeared to side with those made by German Chancellor Angela Merkel. Following his meeting with UK PM Boris Johnson, President Macron said that a solution to the Irish Border must be found in 30 days which gave markets a hint of optimism that a no-deal Brexit could still be avoided. However much like his German counterpart, Macron still insisted that the withdrawal agreement could not be changed, something which would have to happen to seemingly avoid a no-deal Brexit according to Boris.
  • Following Macron’s comments the Pound rallied in FX space, at one stage hitting a near 4-week high of 1.2272 and 1.1071 against the US Dollar and Euro respectively, before eventually closing the day up just over 1% at 1.2251 and 1.1054 respectively.
  • One of the biggest gains made by Sterling was against the Kiwi Dollar, with the pound closing the day up +1.59% against the Dollar and trading at 1.9224. The Kiwi and Aussie Dollar’s were two of the day’s worst performing currencies.
  • Eurozone Flash Manufacturing PMI 47.0 (46.3 Exp).
  • Eurozone Flash Services PMI 53.4 (53.0 Exp).
  • US Flash Manufacturing PMI 49.9 (50.5 Exp).
  • The Financial Times, citing a senior German official, reported that German Chancellor Merkel was merely being ‘polite’ when suggesting a solution to the current deadlock could be reached before the UK leaves the European Union. According to the unnamed source, the ‘train has already left the station’ as far as the UK reaching any compromise on the withdrawal agreement is concerned.
Overnight

  • Japan National Core CPI y/y 0.6% as expected.
  • New Zealand Retail Sales q/q 0.2% (0.1% Exp).
Today
  • Quiet end to the week on the data front.
  • Canadian Core Retail Sales the only high impact number due at 1.30pm.
  • Elsewhere markets and investors will scrutinize every word of US Fed Chair Powell who will be speaking at 3pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1022 -0.30
GBP/USD 1.2202 -0.39
EUR/USD 1.1068 -0.10
AUD/USD 0.6754 -0.03

 

Time (GMT) Region Data Release Forecast Previous
13.30 CAD Core Retail Sales m/m -0.1% -0.3%
14.00 CNY China CB Leading Index m/m 0.9%
14.00 EUR Belgian NBB Business Climate -6.0 -5.0
15.00 USD Fed Chair Powell Speaks
15.00 USD New Home Sales 645K 646K