Newsletter – 26th May 2017

Morning Bulletin

Yesterday

  • Yesterday’s trading was fairly subdued with no massive movement occurring amongst the major currency pairs.
  • Sterling’s recent decline showed no signs of abating, albeit the Pound was pretty steady on the day despite the disappointing UK GDP print released in the morning. Expecting growth of just 0.3% in the 1st quarter of 2017, the actual print fell short at 0.2%.
  • Whilst the GDP print was no doubt a concern ahead of Brexit, there were some positive signs with Business Investment in the UK growing 0.6% over that same quarter, bettering the expected rise of 0.3%.
  • Speaking yesterday afternoon, ECB VP Constancio once again reiterated his view that whilst the Eurozone recovery was becoming more broad based, the overall risks remained tilted to the downside.
  • The only other data of note yesterday came from the United States:
    • Unemployment Claims 234K (238K Exp)
    • Goods Trade Balance -67.6Bn (-64.7Bn Exp)
    • Prelim Wholesale Inventories m/m -0.3% (0.2% Exp)
  • South African Reserve Bank left key interest rate on hold at7.00% as expected. However they did lower their growth outlook for 2017.
  • Speaking yesterday afternoon US Fed Member Brainard was very much upbeat on US economic prospects, stating that the global economy was much brighter than it had been for a good few years and as such the balance of risks for the Fed has shifted to the downside.
Overnight

  • UK ELECTIONS: Sterling has been hammered overnight as a YouGov poll, the first since the atrocities in Manchester, has seen the Tories lead cut dramatically to just 5 points over Labour. Currently the Tories have 43% vs Labour’s 38%.
  • Sterling has hit a 10 day low of 1.2860 against the Dollar, whilst it has plummeted to a fresh 2 month low of 1.1470 against the Euro.
  • Japan National Core CPI y/y 0.3% (0.4% Exp)
  • Japan Tokyo Core CPI y/y 0.1% (0.0% Exp)
  • Japan SPPI y/y 0.7% (0.9% Exp)
Today
  • No UK or European data releases due ahead of the bank holiday weekend.
  • There are however a number of key US figures this afternoon, with Prelim GDP q/q headlining at 1.30pm with growth of 0.9% expected.
  • Just to confirm our offices will be closed Monday for the UK bank holiday. We will however be back in as normal from 8am Tuesday morning.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1477 -0.55
GBP/USD 1.2880 -0.46
EUR/USD 1.1220 +0.10
AUD/USD 0.7440 -0.15

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR ECB Member Coeure Speaks
13.30 USD Core Durable Goods Orders m/m 0.4% 0.0%
13.30 USD Prelim GDP q/q 0.9% 0.7%
15.00 USD Revised UoM Consumer Sentiment 97.6 97.7