Newsletter – 23rd January 2019

Morning Bulletin


  • Whilst the performance of the Pound remains inextricably linked to Brexit, yesterday morning Sterling was lifted by some strong fundamentals in the form of employment data. Including bonuses the UK Average Earnings Index 3m/y came in at +3.4%, that was better than the +3.3% expected and keeps wage growth comfortably ahead of inflation.
  • The UK Unemployment rate also fell to 4.0% which was better than the 4.1% expected. There are now a record 32.54 million people in work in the UK.
  • The only slight dampener on the UK data front was a higher than expected public sector borrowing figure, with the Government needing to borrow £2.1Bn in December which was greater than the £1.1Bn expected.
  • German ZEW Economic data revealed that the mood amongst German investors improved for a third consecutive month in January, albeit with the reading at -15 it still represents a large level of pessimism about the economic outlook for the coming 6 months.
  • According to La Republica the EU Commission is set to slash their forecasts for Italian GDP to +0.6% for 2019 from +1.2%. The move would fall in-line with the Bank of Italy’s own revision earlier this week.
  • Canadian Manufacturing Sales m/m -1.4% (-0.8% Exp)
  • Canadian Wholesale Sales m/m -1.0% (-0.3% Exp)
  • US Existing Home Sales 4.99M (5.27M Exp)

  • Irish PM Leo Varadkar has suggested for the first time that a bilateral agreement would need to be negotiated between the UK and Ireland should the UK crash out of the EU with no-deal in place. He added the agreement would need to have full alignment of Customs to avoid a hard border between Ireland and Northern Ireland.
  • Overnight the Bank of Japan held their benchmark interest rate at -0.10% as expected, with no changes made to their existing policy stance either.
  • New Zealand CPI q/q 0.1% (0.0% Exp)
  • Japan Trade Balance -0.18Tn (-0.29Tn Exp)
  • Japan All Industries Activity m/m -0.3% (-0.4% Exp)
  • Canada Retail Sales the key print this afternoon at 1.30pm.
  • The World Economic Forum is also taking place in Davos this week so as always there is the potential for commentary from the world’s leading Central Bankers to shift markets.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1435 +0.26
GBP/USD 1.2984 +0.21
EUR/USD 1.1353 -0.05
AUD/USD 0.7139 +0.27


Time (GMT) Region Data Release Forecast Previous
09.30 GBP BOE Member Broadbent Speaks
11.00 GBP CBI Industrial Order Expectations 5 8
13.30 CAD Core Retail Sales m/m 0.0%
14.00 USD HPI m/m 0.2% 0.3%
15.00 EUR Consumer Confidence -6 -6
15.00 USD Richmond Manufacturing Index -6 -8