Newsletter – 23rd February 2018

Morning Bulletin

Yesterday

  • Sterling got off to a shaky start yesterday morning as a second estimate of UK GDP growth revealed the economy actually grew by just +0.4% in the fourth quarter of 2017, down on the original +0.5% estimate. That meant growth for 2017 stood at +1.7%, rather than +1.8%.
  • There was further disappointing UK data in the form of CBI Realised Sales. The survey showed British retail sales had slowed for a third consecutive month in February with a reading of +8. That was down from +12 in January and some way short of the expected +13, as the squeeze on household spending continues to take hold.
  • Despite the disappointing data the Pound managed to have a solid day in FX space overall, most notably against the US Dollar. Having been trading around 1.3885 in the morning the Pound closed the day up around 1.3955, a gain of 0.50%.
  • Minutes from the ECB’s January meeting were released yesterday and they revealed that policymakers are growing increasingly confident about inflation within the Eurozone, but stopped short of changing their forward guidance on monetary policy as it could be premature.
  • The Canadian Dollar was one of yesterday’s biggest fallers, with the Dollar taking a hit following some surprisingly weak Retail Sales numbers. Sales dipped -0.8% in December, against an expected rise of +0.2% and following three months of growth. GBP/CAD spiked from 1.7620 to 1.7710 immediately after the figure, similarly EUR/CAD rocketed from 1.5575 to 1.5668.
Overnight

  • New Zealand Retail Sales q/q 1.7% (1.4% Exp)
  • Japan CPI y/y 1.4% (1.3% Exp)
  • Speaking overnight US Fed Member Kaplan said he considers 3 hikes in 2018 as reasonable.
  • Fed Member Bullard urged caution on the idea that the Fed needed to hike as much as 4 times this year, stating ‘the idea that we have to go 100 basis points in 2018, that seems like a lot to me’.
  • German Final GDP q/q 0.6% as expected
Today
  • Relatively quiet end to the week on the data front. Just Eurozone CPI y/y to look out for this morning, and Canadian CPI m/m this afternoon.
  • We then end the week with a number of US Federal Reserve speakers.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1344 +0.26
GBP/USD 1.3972 +0.15
EUR/USD 1.2315 -0.12
AUD/USD 0.7828 -0.22

 

Time (GMT) Region Data Release Forecast Previous
10.00 EUR Final CPI y/y 1.3% 1.3%
12.00 GBP BOE Member Ramsden Speaks
13.30 CAD CPI m/m 0.4% -0.4%
15.15 USD Fed Member Dudley Speaks
18.30 USD Fed Member Mester Speaks
20.40 USD Fed Member Williams Speaks