Newsletter – 25 January 2017

Morning Bulletin


  • The main risk event yesterday was of course the Supreme Court’s ruling on whether the UK Government could trigger Article 50 without parliament’s approval. Two key points emerged:
    • The court voted 8-3 that the UK Government couldn’t trigger Article 50 without parliament’s approval.
    • Devolved UK assemblies do not need to give approval before Article 50 is triggered.
  • That fact that 4 draft versions of the ‘Brexit Bill’ were drawn up prior to this verdict would suggest the Government, if not fully expecting to lose, were at the very least prepared for this outcome.
  • It was the second point that made an impact in FX space with Sterling depreciating by some 0.5% in the immediate aftermath. There could have been an element of profit taking involved, however the fact that the Scottish, Welsh & Northern Ireland assemblies now legally have no say in the triggering of Article 50 could prevent further delays or prospect of a ‘softer’ Brexit as the assemblies could have demanded access to the single market as part of any deal.
  • Almost lost in amongst the excitement of the court ruling, UK Government Borrowing figures were released at 9.30am as well and they proved better than expected, with government borrowing falling to £6.9Bn in December, down £0.4Bn from a year previous.
  • Prior to these UK releases, data from the Eurozone was reported and it continued to head in the right direction (Score over 50.0 represents industry expansion):
    • Flash Manufacturing PMI 55.1 (54.8 Exp)
    • Flash Services PMI 53.6 (53.9 Exp)
  • A largely quiet afternoon included a number of low to medium impact US releases:
    • Flash Manufacturing PMI 55.1 (54.6 Exp)
    • Existing Home Sales 5.49M (5.54M Exp)
    • Richmond Manufacturing Index 12 (7 Exp)

  • Australian CPI q/q 0.5% (0.7% Exp)
  • Japanese Trade Balance 0.36Tn (0.22Tn Exp)
  • It’s been reported that President Trump is to sign an executive order today to build the Mexico border wall. He is also due to unveil some further national security actions.

  • Could be a quiet day ahead with very little data to contend with. The only key release comes in the form of German IFO Business Climate at 9am with an expected reading of 111.3.


Current at time of distribution

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1667 +0.01
GBP/USD 1.2519 -0.01
EUR/USD 1.0731 +0.02
AUD/USD 0.7531 -0.61


Current at time of distribution

Time (GMT) Region Data Release Forecast Previous
09.00 EUR German IFO Business Climate 111.3 111.0
11.00 GBP CBI Industrial Order Expectations 2 0
14.00 EUR Belgian NBB Business Climate 0.4 -0.2
14.00 USD HPI m/m 0.4% 0.4%
16.00 GBP BOE Gov Carney Speaks
21.45 NZD CPI q/q 0.3% 0.2%