Newsletter – 26th July 2017

Morning Bulletin

Yesterday

  • Once again moves in FX space yesterday morning were fairly subdued with a distinct lack of data scheduled for release.
  • The Euro did however find support following an impressive German IFO Business Climate print. The print of 116.0 was better than the forecasted 114.9, and represented the 3rd month in a row where the reading has hit a record all time high, indicating that German businesses are increasingly confident about the current economic outlook.
  • EUR/USD did briefly hit a near 2 year high of 1.1700 yesterday morning, however that move was short lived as the pair declined back to the 1.1650’s by early afternoon.
  • UK CBI Industrial Trends Survey found UK manufacturers grew at the fastest rate since January 1995 in the three months up to July. The survey also reported employee headcount increased at its fastest rate in three years and that output growth is expected to continue in the coming quarter. All in all the report was very positive.
  • US CB Consumer Confidence was the headline figure yesterday afternoon and it was impressive, with the reading of 121.1 smashing the expected 116.5. This reading was the second highest in 16 years, the highest coming back in March as the Trump administration was just getting underway. Despite President Trump’s struggles to enact many of his campaign promises so far, the big reason for this confidence was put down to the current ability of Americans to be able to find full time work as the Labour market continues to create jobs.
  • Speaking yesterday afternoon President Trump said he was working on a major trade deal with the UK which could be big and exciting. He also took a swipe at the EU stating they were very protectionist and that it must stop.
Overnight

  • US Republicans secured just enough votes to ensure there would be a debate on overhauling Healthcare. However just a few hours later Republican leaders suffered yet another setback as the Senate voted down their most comprehensive plan to replace ‘Obamacare’ in a 57-43 vote.
  • Australian CPI q/q 0.2% (0.4% Exp).
  • The Aussie Dollar is on the back-foot this morning following that weak CPI print, coupled with RBA Governor Lowe’s commentary shortly afterwards with the  Governor suggesting policy rates could need to stay at lower levels for longer.
  • New Zealand Trade Balance 242M (147M Exp).
  • Japan SPPI y/y 0.8% as expected.
Today
  • Once again there’s very little data set for release today.
  • However this morning we do have key UK GDP q/q data due at 9.30am.
  • Then later this evening focus will firmly be on the US Federal Funds Rate decision and accompanying FOMC statement.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1192 +0.06
GBP/USD 1.3017 -0.05
EUR/USD 1.1628 -0.14
AUD/USD 0.7895 -0.51

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Prelim GDP q/q 0.3% 0.2%
09.30 GBP BBA Mortgage Approvals 39.9K 40.3K
15.00 USD New Home Sales 615K 610K
19.00 USD US Federal Funds Rate <1.25% <1.25%
19.00 USD Accompanying FOMC Statement