Newsletter – 28th February 2019

Morning Bulletin

Yesterday

  • Sterling continued to advance in FX space yesterday, buoyed by the ever increasing likelihood of the Brexit deadline being extended and the prospect of a no-deal exit being taken off the table following Theresa May’s comments on Tuesday.
  • In fact the Pound hit a fresh 21-month high of 1.1723 against the Euro at one stage yesterday afternoon before eventually closing around the 1.1700 handle and up +0.53% on the day.
  • Against the US Dollar, Sterling rallied to a near 8-month high of 1.3350 before closing the day up +0.39% at 1.3300.
  • According to the Evening Standard a number of sources have suggested the EU will insist any delay to the Brexit deadline be as long as up to two years, effectively replacing the planned transition period with continued membership up to December 2020.
  • European Leaders had their say on a potential extension yesterday with German Chancellor Merkel saying she would not refuse it should the UK need the time, whilst her French counterpart Macron said they would in fact block a delay unless there was a clear objective based on a new choice.
  • Inflation in Canada fell slightly short of expectations on a month-on-month basis in January with a 0.1% rise instead of the 0.2% forecast. That also meant Annual inflation dropped to 1.4% from the 2.0% registered in December and effectively ended any imminent need for a rate hike from the Bank of Canada as their target inflation rate stands at 2.0%.
  • US Goods Trade Balance -79.5Bn (-74.1Bn Exp)
  • US Final Wholesale Inventories m/m 1.1% (0.4% Exp)
Overnight

  • Labour Leader Jeremy Corbyn has vowed that his party will now back a second EU referendum following the commons defeat of his alternative Brexit plan.
  • There has been a raft of data released overnight and so far this morning:
  • Japan Prelim Industrial Production m/m -3.7% (-2.5% Exp)
  • Japan Retail Sales y/y 0.6% (1.4% Exp)
  • New Zealand ANZ Business Confidence -30.9 (-24.1 Previously)
  • China Manufacturing PMI 49.2 (49.5 Exp)
  • China Non-Manufacturing PMI 54.3 (54.5 Exp)
  • German Import Prices m/m -0.2% (0.3% Exp)
Today
  • Very similar to yesterday, quiet this morning with all key data emanating from Canada and the United States this afternoon.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1678 -0.23
GBP/USD 1.3304 -0.03
EUR/USD 1.1392 +0.20
AUD/USD 0.7139 0.00

 

Time (GMT) Region Data Release Forecast Previous
10.00 EUR Italian Prelim CPI m/m 0.2% 0.1%
13.00 USD Fed Member Clarida Speaks
13.30 CAD Current Account -14.0Bn -10.3Bn
13.30 CAD RMPI m/m 4.1% 3.8%
13.30 USD Advance GDP q/q 2.6% 3.4%
13.30 USD Unemployment Claims 221K 216K
14.45 USD Chicago PMI 58.1 56.7