Newsletter – 29th January 2018

Morning Bulletin

Friday

  • Sterling kicked off trading Friday morning on a strong footing following better than expected GDP data. The figure showed that the UK economy had grown by 0.5% in the final quarter of 2017, bettering the 0.4% expected.
  • Sterling rallied in FX space following this data, trading to a day’s high of 1.4287 against the US Dollar and 1.1461 against the Euro. These gains were short lived however as the Pound slumped back down over the course of the afternoon.
  • Speaking Friday, UK Brexit Secretary David Davis said he was confident the UK could secure a transitional agreement at the March EU Council meeting.
  • There was a raft of US data released Friday afternoon:
    • Advance GDP q/q 2.6% (3.0% Exp)
    • Core Durable Goods Orders m/m 0.6% (0.5% Exp)
    • Goods Trade Balance -71.6Bn (-68.6Bn Exp)
  • President Trump’s eagerly awaited speech at Davos didn’t fail to dissapoint. Whilst the President did strike a more concilliatory tone on the whole, stating the US was open for business, he couldn’t resist a couple of scathing attacks. This time he warned the US would no longer turn a blind eye to ‘Predatory’ trade practices.
  • The Canadian Dollar was one of Friday’s worst performers following a greater than expected decline in Inflation during December. The print of -0.4% was worse than the already poor -0.3% that was expected.
Overnight

  • German Import Prices m/m 0.3% as expected
  • Speaking over the weekend ECB Member Knot said the Central Bank’s QE program needs to come to an end ‘as soon as possible’. He suggested ending QE in September would allow room to start looking at the possibility of rate hikes in 2019, adding that Governments, banks, households and businesses should start building buffers now the economy is doing well.
Today
  • Typically quiet Monday in prospect with just a few lower key US data releases due this afternoon.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1370 -0.19
GBP/USD 1.4103 -0.42
EUR/USD 1.2401 -0.21
AUD/USD 0.8085 -0.28

 

Time (GMT) Region Data Release Forecast Previous
13.30 USD Core PCE Price Index m/m 0.2% 0.1%
13.30 USD Personal Spending m/m 0.5% 0.6%
13.30 USD Personal Income m/m 0.3% 0.3%
21.45 NZD Trade Balance -125M -1193M