Newsletter – 25th April 2019

Morning Bulletin

Yesterday

  • Despite a worse than expected figure for March, with the UK Government running a small deficit of £0.8Bn rather than an expected surplus of £0.8Bn, the Government’s borrowing for the financial year ending 31st March was at a 17-year low. Borrowing between April 2018 and March 2019 stood at £24.7Bn, that was £17.2Bn less than the previous year and the lowest borrowing figure since April 2001 to March 2002.
  • German IFO Business Climate 99.2 (99.9 Exp)
  • The Aussie Dollar continued to come under pressure during trading yesterday following the weak Inflation print released the previous night. With Inflation flat for the first quarter of 2019 traders are starting to speculate that the Aussie central bank could cut interest rates later in the year.
  • The Aussie was down by more than 1.0% against both the Pound and the US Dollar, trading 1.8423 and 0.7028 respectively by the close.
  • Aided in part by the slump in the Aussie Dollar, but also due to broad-based strength, the US Dollar Index hit yet another recent high yesterday with the ICE US Dollar Index surging to a fresh 22-month high of 98.141.
  • The Bank of Canada kept their benchmark interest rate on hold at 1.75% yesterday afternoon as expected. The central bank did however drop their previous bias for future rate hikes as they acknowledged that the economy has stalled over the last 6 months which has allayed some previous concerns around inflation. The BOC added that rates are likely to be on hold until at least sometime next year.
  • Speaking about the ongoing talks between the US and China, US President Donald Trump, yesterday afternoon said that they ‘we’re doing well on trade, we’re doing well with China’. The next round of talks are due to be held on the 30th April as the two superpowers continue to try  and bring a close to their trade dispute.
Overnight

  • The Bank of Japan held interest rates at -0.10% overnight as widely expected. However the BOJ did revise their forward guidance, suggesting that they expect to keep interest rates at extremely low levels until at least the spring of 2020.
  • Spanish Unemployment Rate 14.7% (14.5% Exp)
Today
  • Quiet day on the economic data front.
  • US Core Durable Goods Orders the only high impact print due at 1.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1565 0.00
GBP/USD 1.2894 -0.06
EUR/USD 1.1147 -0.05
AUD/USD 0.7011 -0.05

 

Time (GMT) Region Data Release Forecast Previous
11.00 GBP CBI Industrial Order Expectations 3 1
13.30 USD Core Durable Goods Orders m/m 0.2% -0.1%
13.30 USD Unemployment Claims 199K 192K
23.45 NZD Trade Balance 131M 12M