Newsletter – 29th January 2019

Morning Bulletin

Yesterday

  • Very little in the way of economic data to digest yesterday.
  • Having enjoyed a solid week of gains sterling was one of the weaker performers in FX space yesterday as Brexit uncertainties came to the fore once again.
  • GBP/EUR dropped from 1.1550 to close the day hovering around the 1.1500 mark.
  • According to the European Commission the UK-EU withdrawal agreement is not open for renegotiation. The commissions spokesman added that the EU27 hold a unanimous position which is reflected in the EU’s stance.
  • This rhetoric was reinfored by comments from the EU’s Deputy Brexit negotiator Sabine Weyand who said the EU now needs clarity from the UK on how it sees post-Brexit trade relations if they are to move forward. Weyand also firmly stated there would be no renegotiation of the withdrawal agreement and that the only margin for movement would be on the political declarations.
  • Despite concerns over trade wars, slowing growth and the uncertainty caused by Brexit, speaking yesterday morning ECB Member Klaas Knot said the European economy is ‘very much okay’. He added that whilst subdued inflation was troubling it is premature to be talking about a potential recession.
  • Speaking yesterday afternoon ECB President Mario Draghi acknowledged that a recent run of data and information had continued to be weaker than expected and as such significant monetary policy stimulus remains essential. He added the ECB remain ready to adjust all policy instruments as appropriate.
Overnight

  • New Zealand Trade Balance 246M (225M Exp)
  • Australia NAB Business Confidence 3 (3 Previous)
  • Speaking overnight, and in stark contrast to the assessment of financial markets, Reserve Bank of Australia member Ian Harper said he believes the next move in Aussie interest rates will be higher. In fact markets are currently pricing in a greater than 50% chance that the RBA cash rate will be lower by the end of 2019.
  • Swiss Trade Balance 1.90Bn (4.55Bn Exp)
  • Spanish Unemployment Rate 14.5% (14.4% Exp)
Today
  • Very little in the way of economic data today. US CB Consumer Confidence in fact the only release of any note due at 3pm.
  • Markets and investors will once again look to the UK Parliament with a set of votes due later this afternoon on some potentially key amendments to the outlook for Brexit.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1510 -0.07
GBP/USD 1.3174 +0.13
EUR/USD 1.1443 +0.16
AUD/USD 0.7167 +0.04

 

Time (GMT) Region Data Release Forecast Previous
14.00 USD S&P/CS Composite-20 HPI y/y 5.0% 5.0%
15.00 USD CB Consumer Confidence 125.0 128.1
TBC GBP Parliament Brexit Votes