Newsletter – 27 January 2017

Morning Bulletin

Yesterday

  • Having suffered sizeable losses following President Trump’s inauguration the US Dollar finally seized back some initiative in FX space yesterday. There was no one particular reason for yesterday’s turnaround as President Trump continued to dish out executive orders left, right and centre. Ultimately the US economy is fundamentally very strong at the moment and so the Dollar should have underlying strength as a result.
  • The mixed bag of US data in the afternoon didn’t dampen the already strengthening Dollar:
    • US Unemployment Claims 259K (247K Exp)
    • US New Home Sales 536K (585K Exp)
    • US Flash Services PMI 55.1 (54.4 Exp)
  • UK economy continued to tick over nicely in the 4th quarter of 2016 as revealed yesterday morning. UK GDP was up 0.6% between October and December against an expected 0.5% rise. All in all sterling performed solidly on the day, following a very positive 7-10 day stretch.
Overnight

  • Japan: Tokyo Core CPI y/y -0.3% (-0.4% Exp)
  • Australian Import Prices q/q 0.2% (0.4% Exp)
  • Speaking overnight ECB member Weidmann said the outlook for Eurozone is quite positive with inflation heading towards the ECB’s target level. Weidmann said if sustained at that level the ECB could then begin looking for an exit strategy to the current loose monetary policy.
Today

  • Not a massive amount of data to digest today. The most important number will be US GDP for the 4th Quarter of 2016, reported in an annualized format a reading of 2.1% is expected.
  • UK PM May is due to meet President Trump today, talks of a trade deal post-Brexit could be high on the agenda.
  • Worth noting that today is also a Chinese Bank Holiday as China commences their Lunar New Year celebrations.

 

MAJOR CURRENCY PAIRS
Current at time of distribution

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1743 -0.38
GBP/USD 1.2538 -0.40
EUR/USD 1.0676 -0.05
AUD/USD 0.7520 -0.16

 

ECONOMIC CALENDAR
Current at time of distribution
Time (GMT) Region Data Release Forecast Previous
09.00 EUR M3 Money Supply y/y 4.9% 4.8%
09.00 EUR Private Loans y/y 2.0% 1.9%
13.30 USD Advance GDP q/q 2.1% 3.5%
13.30 USD Core Durable Goods Orders m/m 0.5% 0.6%
14.30 EUR ECB Member Costa Speaks
15.00 USD Revised Uom Consumer Sentiment 98.2 98.1