Newsletter – 24th May 2019

Morning Bulletin

Yesterday

  • Mixed bag for Sterling in FX space yesterday. That was pretty much summarised by the -0.13% fall against the Euro to close at 1.1338, and a +0.11% gain versus the US Dollar to close at 1.2674.
  • Things were actually far worse for the Pound during early trading as markets absorbed news of Andrea Leadsom’s resignation from Theresa May’s Cabinet. However there was a recovery over the course of the day.
  • European data dominated the morning session:
  • Eurozone Flash Manufacturing PMI 47.7 (48.2 Exp)
  • Eurozone Flash Services PMI 52.5 (53.0 Exp)
  • The German IFO Business Climate reading painted a gloomy picture with morale amongst German businesses declining by more than expected in May. The index fell to 97.9 from 99.2 in April with the services sector in particular taking a hit.
  • Minutes from the most recent ECB monetary policy meeting revealed that policymakers were concerned that economic growth was weaker than they had feared. They had also previously expressed confidence that the economy would pick up through the second half of the year but that confidence also appears to be eroding.
  • Speaking yesterday the EU’s Jean-Claude Juncker said the UK was heading for yet another Brexit extension in October as he criticised MP’s for misplacing their efforts towards ousting Theresa May rather than finding some agreement on a Brexit deal.
  • US Unemployment Claims 211K (215K Exp)
  • US Flash Manufacturing PMI 50.6 (53.0 Exp)
  • US Flash Services PMI 50.9 (53.6 Exp)
Overnight

  • It’s emerged overnight and this morning that UK PM Theresa May will announce the date of her departure from No 10 later today following increasing pressure from within her own party. Mrs May’s confirmed exit would trigger a leadership contest with the new leader likely to push Brussels for a more decisive Brexit Deal.
  • It is believed Theresa May would remain in post throughout the duration of the Leadership contest which could take around 6 weeks and could commence as soon as the 10th June.
  • As we have become accustomed to now, Trump’s rhetoric towards a deal with China has switched once again most recently the President said he see’s a ‘good possibility’ of a deal with China and that it’s happening fast.
  • New Zealand Trade Balance 433M (450M Exp)
  • Japan All Industries Activity m/m -0.4% (-0.1% Exp)
  • Japan National Core CPI y/y 0.9% as expected
Today
  • Pretty quiet day to end the week where economic data is concerned.
  • Just the two higher impact prints with UK Retail Sales at 9.30am and US Durable Goods Orders at 1.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1324 +0.05
GBP/USD 1.2669 +0.09
EUR/USD 1.1187 +0.06
AUD/USD 0.6900 +0.03

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Retail Sales m/m -0.3% 1.1%
11.00 GBP CBI Realised Sales 6 13
13.30 USD Core Durable Goods Orders m/m 0.1% 0.3%
14.00 EUR Belgian NBB Business Climate -2.3 -3.2