Newsletter – 29th August 2018

Morning Bulletin

Yesterday

  • Data was fairly thin on the ground yesterday, particularly in terms of higher impact data.
  • Eurozone M3 Money supply y/y 4.0% (4.3% Exp)
  • Eurozone Private Loans y/y 3.0% as expected
  • According to the Evening Standard BOE Governor Mark Carney has been asked by the Government to stay on for another year in order to provide continuity during what is likely to be a turbulent Brexit. Governor Carney has previously said he would serve 6 of his initial 7 year term which would see him leave in June 2019.
  • On a slow news day the Pound continued to fall against the Euro yesterday afternoon, falling to a fresh 11-month low of 1.0986.
  • In stark contrast the Pound rallied towards a 3-week high of 1.2931 against the US Dollar as the greenback came under pressure in FX markets. That surge into the 1.2900’s didn’t last too long however as GBP/USD was firmly back under the 1.2900 handle by late afternoon.
  • Certainly no sign of Donald Trumps trade tactics coming to fruition just yet. The US Goods Trade Balance widened to -72.2 Bn in July, that was greater than the -68.6Bn deficit forecast.
  • US Prelim Wholesale Inventories m/m 0.7% (0.1% Exp)
  • US Consumers remain incredibly upbeat about the US economy and prospects for the next 6 months according to the latest reading. The CB Consumer Confidence measure was at 133.4 in August, the highest reading since October 2000.
Overnight

  • According to the Daily Express the UK and EU are set to drop their October deadline for thrashing out a Brexit deal with both parties acknowledging it would be impossible to meet.
  • US Lawmakers from both the Democratic and Republican parties have suggested Donald Trumps new trade deal with Mexico could struggle to win approval from Congress unless Canada also comes back on board.
  • Shop prices in the UK rose for the first time in 5 years during August according to figures from the British Retail Consortium (BRC). The Shop Price Index y/y rose 0.1% against a previous fall of -0.3%. The main driver of the rise was the jump in food inflation caused by the recent heatwave.
  • Japan Consumer Confidence 43.3 (43.4 Exp)
  • German Gfk Consumer Climate 10.5 (10.6 Exp)
  • French Prelim GDP q/q 0.2% as expected
Today
  • Little to no data set for release this morning.
  • US GDP q/q will be the key print today, set for release at 1.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1030 +0.22
GBP/USD 1.2872 +0.03
EUR/USD 1.1670 -0.20
AUD/USD 0.7309 -0.37

 

Time (GMT) Region Data Release Forecast Previous
13.30 CAD Current Account -15.3Bn -19.5Bn
13.30 USD Prelim GDP q/q 4.0% 4.1%
15.00 USD Pending Home Sales m/m 0.3% 0.9%