Newsletter – 23rd May 2018

Morning Bulletin


  • According to figures released by the ONS yesterday morning Public Sector Net Borrowing in the UK fell to its lowest level since 2007. Borrowing between April 2017 and March 2018 came in at £40.5Bn, that was down £5.7Bn from the previous year and was £4.7Bn less than forecasts by the office for budgetary responsibility.
  • Bank of England Governor Mark Carney and a number of his colleagues spoke before the UK Parliaments Treasury Committee yesterday morning, some of the key point included:
  • Carney said the Brexit vote had left UK households £900 worse off due to the UK’s growth prospects being lowered by up to 2%.
  • Carney added there could be a sharp pick-up in business investment when a Brexit deal is struck.
  • BOE Member Vlieghe said his projections would see a need for one or two quarter point rate rises per year over the three year forecast period.
  • According to BOE Member Saunders the impact of the weaker Pound on inflation is now starting to fade.
  • UK Factory orders declined to their lowest levels since 2016 in May according to a CBI survey. The survey showed monthly order book balances fell to -3, which was down on the +2 expected and the +4 reading last month. According to the CBI’s head of economics UK manufacturing has lost a bit of momentum due to a softening of both domestic and global growth.
  • Canadian Wholesale Sales m/m 1.1% (0.8% Exp)
  • US Richmond Manufacturing Index 16 (9 Exp)
  • According to ECB Member Liikanen interest rates in the Eurozone will remain at a low level for an extended period of time after QE ends. Adding that it would take some time for core inflation to support the development of headline inflation.

  • President Trump says there is a good chance that a summit with North Korea will not work out for June. He said preparations were ongoing but could be delayed.
  • Serious doubts have been raised over the credentials of the proposed Italian PM. Giuseppe Conte was a completely left field selection to begin with, given that he has no prior political experience, but it has now emerged that he may have padded out his academic CV.
  • Japan Flash Manufacturing PMI 52.5 (53.6 Exp)
  • Japan All Industries Activity m/m 0.0% (0.1% Exp)
  • French Flash Manufacturing PMI 55.1 (53.6 Exp)
  • French Flash Services PMI 54.3 (57.1 Exp)
  • German Flash Manufacturing PMI 56.8 (57.9 Exp)
  • German Flash Services PMI 52.1 (53.1 Exp)
  • There could be plenty of movement in FX space today with a decent amount of data set for release.
  • UK CPI data headlines at 9.30am with inflation expected to remain at 2.5%.
  • This afternoon we look to US Manufacturing and Services PMI data at 2.45pm.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1424 +0.18
GBP/USD 1.3378 -0.36
EUR/USD 1.1708 -0.60
AUD/USD 0.7527 -0.62


Time (GMT) Region Data Release Forecast Previous
09.00 AUD RBA Gov Lowe Speaks
09.00 EUR Eurozone Flash Manufacturing PMI 56.1 56.2
09.00 EUR Eurozone Flash Services PMI 54.7 54.7
09.30 GBP CPI y/y 2.5% 2.5%
09.30 GBP PPI Input m/m 1.0% -0.1%
11.00 GBP CBI Realised Sales 4 -2
14.45 USD Flash Manufacturing PMI 56.6 56.5
14.45 USD Flash Services PMI 54.9 54.6
15.00 EUR Eurozone Consumer Confidence 0 0
15.00 USD New Home Sales 680K 694K
19.00 USD Fed FOMC Meeting Minutes