Newsletter – 24th September 2018

Morning Bulletin

Friday

  • The Pound was hammered in FX space Friday afternoon as the odds of a no-deal Brexit continue to mount. Following the PM’s Chequers plan being rejected by EU leaders on Thursday, speaking Friday afternoon UK PM May said that negotiations had reached an impasse and the EU needed to come up with an alternative solution to her proposals. Mrs May reiterated that the Government would not overturn the result of the referendum nor would she break up the country.
  • GBP/EUR traded down to a 2-week low of 1.1113 having started the day around 1.1200.
  • GBP/USD traded down to a 1-week low of 1.3054 having been in the Mid-1.3200’s.
  • Speaking shortly before Theresa May, Brexit Secretary Dominic Raab said that the UK had answered plenty of the EU’s questions but believes the PM was treated badly in Salzburg on Thursday. Raab added that some comments from EU leaders was unstatesman like.
  • Eurozone Flash Manufacturing PMI 53.3 (54.4 Exp)
  • Eurozone Flash Services PMI 54.7 (54.5 Exp)
  • Canada CPI m/m -0.1% as expected
  • Canada Core Retail Sales m/m 0.9% (0.6% Exp)
Overnight

  • The latest round of tariffs from the US on Chinese goods kicked in around 4am this morning. The latest tariffs amount to 10% on some $200Bn worth of Chinese goods as the trade war between the world’s two largest economies shows no signs of abating.
  • Staying with American politics and according to a new poll, with just two months before Mid-term elections, some 52% of voters would prefer to see Democrats control Congress, whilst 40% said they preferred Republican control. That 12% lead, is up from 8% in August.
  • No great moves in FX space so far this morning. The Pound has however stabilised following that aggressive Brexit related sell off Friday afternoon.
Today
  • Typically quiet Monday in prospect with very little data set for release.
  • Worth noting today is a bank holiday in Japan and China.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1150 +0.29
GBP/USD 1.3117 +0.31
EUR/USD 1.1759 +0.11
AUD/USD 0.7273 -0.17

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR German IFO Business Climate 103.2 103.8
09.30 GBP FPC Statement
11.00 GBP CBI Industrial Order Expectations 5 7
13.30 CAD Wholesale Sales m/m 0.4% -0.8%
14.00 EUR ECB President Draghi Speaks
14.00 EUR Belgian NBB Business Climate -0.5 -0.3