Newsletter – 23rd January 2018

Morning Bulletin

Yesterday

  • There was a distinct lack of data released yesterday and for the large part it was apparent with very little movement in FX space.
  • The afternoon however proved fruitful for the Pound, with Sterling currency pairs making solid gains, seemingly still buoyed by the prospect of the UK getting a ‘special’ Brexit deal following those comments from French President Macron over the weekend.
  • GBP/USD jumped to yet another fresh post-referendum high of 1.3988, up around a cent on the day.
  • Similarly, GBP/EUR rallied to a fresh 2018, and 5-week high of 1.1409, up around half a cent on the day.
  • The International Monetary Fund (IMF) have raised their Global growth expectations for the next two years, citing global growth momentum and US tax cuts as the reason:
    • 2018: Upgraded to +3.9%; +3.7% previous
    • 2019: Upgraded to +3.9%; +3.7% previous
  • Canadian Wholesale Sales m/m 0.7% (1.0% Exp)
  • It was being reported late yesterday afternoon that US Senate Democrats were prepared to accept a deal that would pave the way for a Bill allowing the US Federal Government to reopen, following the weekends shutdown.
Overnight

  • Building on from that last point, the US Senate did go on to vote (78-17) in favour of the stopgap funding Bill, which will end the Government shutdown but only until the 8th February.
  • The Bank of Japan left interest rates on hold at -0.10% as expected this morning, in an 8-1 vote. The Central Bank left their policy statement unchanged but did make one slight tweak regarding inflation. Previously they noted inflation expectations were ‘weakening slightly’, whereas this morning’s statement said they were ‘broadly unchanged’.
  • Japan All Industries Activity m/m 1.0% (0.9% Exp).
  • According to a ‘Gallup’ poll, President Trumps approval rating now stands at 36%, down from 38% last week.
  • According to the Independent, the UK Government has already ‘agreed in principal’ a Norway-style deal for a transitional period. During that transitional period the UK would have to accept all EU rules with no power to shape/influence them.
Today
  • Once again there isn’t a great deal of data set for release today.
  • Worth noting however the World Economic Forum takes place in Davos this week. The event is attended by Prime Ministers, Finance Ministers and central bankers from across the world.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1406 -0.02
GBP/USD 1.3954 -0.22
EUR/USD 1.2233 -0.23
AUD/USD 0.7964 -0.63

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Public Net Sector Borrowing 4.2Bn 8.1Bn
10.00 EUR German ZEW Economic Sentiment 17.8 17.4
11.00 GBP CBI Industrial Order Expectations 13 17
15.00 EUR Consumer Confidence 1 1
15.00 USD Richmond Manufacturing Index 19 20