Newsletter – 28th August 2018

Morning Bulletin


  • German Final GDP q/q 0.5% as expected.
  • The Aussie Dollar was one of Friday’s strongest performers in currency markets following the closely fought victory of the Liberal Party’s Scott Morrison over conservative rival Peter Dutton, with Mr Morrison  now replacing the ousted Malcolm Turnbull as Prime Minister.
  • US Core Durable Goods Orders m/m 0.2% (0.5% Exp)
  • According to the Wall street journal trade talks between the US and China last week failed to produce any real signs of progress and as such the chances of a deal any time soon are slim to none.
  • Speaking Friday afternoon Fed Member Bullard said that if it was up to him he would stand pat with regards to hiking interest rates again this year, adding that he doesn’t see much inflation pressure and so the Fed should react as the data comes in.
  • Also speaking Friday afternoon and in slight contrast, Fed Chair Powell said he fully expects to see further interest rate rises ahead as the economy remains strong and capable of handling further policy normalization. Powell stated ‘as the most recent FOMC statement indicates, if the strong growth in income and jobs continue, further gradual increases in the target range for the federal funds rate will likely be appropriate’.   


Over the Long Weekend

  • GBP/EUR has hit a fresh 11-month low of 1.1018 this morning following comments from UK PM Theresa May. Speaking to South African reporters on her way to a 5-day visit of Africa, the PM suggested a no-deal Brexit would not be the end of the world and that the UK could still make a success of Brexit even if it were to bomb out of the EU with no deal in place.
  • German IFO Business Climate 103.8 (101.9 Exp).
  • The Euro in fact performed strongly across the board in FX space yesterday following the above German IFO print. With the German economy the main engine of the Eurozone, indications that the German economy will continue to see solid growth in the third quarter is seen as positive for the Eurozone as a whole.
  • US President Donald Trump announced yesterday that his administration had finally reached a deal with Mexico on issues that had previously held up the renegotiation of NAFTA for over 12 months. The President said the bilateral trade deal should be renamed the ‘United States-Mexico Trade Agreement’ to shake the perceived negative connotations of NAFTA.
  • Little in the way of key data set for release today.
  • US CB Consumer Confidence arguably the higher impact print due at 3pm.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1029 -0.10
GBP/USD 1.2887 -0.03
EUR/USD 1.1683 +0.05
AUD/USD 0.7342 -0.09


Time (GMT) Region Data Release Forecast Previous
13.30 USD Goods Trade Balance -68.6Bn -67.9Bn
13.30 USD Prelim Wholesale Inventories m/m 0.1% 0.1%
15.00 USD CB Consumer Confidence 126.6 127.4
15.00 USD Richmond Manufacturing Index 18 20