Newsletter – 2nd February 2018

Morning Bulletin

Yesterday

  • UK Manufacturing PMI data headlined yesterday morning with the actual print of 55.3 falling short of the 56.5 expected. That was the lowest reading since the Middle of 2017 but still showed the industry is comfortably in expansionary territory.
  • The Pound did come under pressure in FX space following the data. Having traded as high as 1.1471 ahead of the print, GBP/EUR dropped back down into the low 1.1400’s following the data before eventually closing the day down at 1.1408.
  • There was no respite for the US Dollar yesterday with the Greenback getting hammered once more in FX space. The Dollar Index traded as low as 88.65, just a fraction away from recent lows.
  • The Dollar continued to slump despite positive economic data out of the US yesterday afternoon:
    • Unemployment Claims 230,000 (237,000 Exp)
    • ISM Manufacturing PMI 59.1 (58.7 Exp)
    • Prelim Nonfarm Productivity q/q -0.1% (0.8% Exp)
  • In an interview with a German Newspaper, ECB Member Nowotny said ‘I make no secret of the fact that we are now in a situation where, from my point of view, we should end the bond buying programme’.
  • According to a UK CBI survey, British small manufacturers have seen the fastest rise in new orders since 1995 in November. Of the 339 firms surveyed between December and January, 43% reported an increase in total orders, whilst 18% reporting a fall. That positive balance between the two is the largest since April 1995.
Overnight

  • A number of GOP sources have suggested the US House of Congress could vote next Tuesday on a stopgap bill to fund the Government through to the 22nd March.
  • Australia PPI q/q 0.6% (0.4% Exp)
  • Spanish Unemployment Change 63.7K (50.3K Exp)
Today
  • UK Construction PMI is the key print this morning due at 9.30am.
  • This afternoon will be dominated by key US jobs data as it is of course Non-Farm Friday. We have Job Creation, Average Earnings and the overall Unemployment rate due at 1.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1384 -0.19
GBP/USD 1.4233 -0.19
EUR/USD 1.2501 -0.05
AUD/USD 0.7997 -0.51

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Construction PMI 52.0 52.2
13.30 USD Average Hourly Earnings m/m 0.2% 0.3%
13.30 USD Non-Farm Employment Change 181K 148K
13.30 USD Unemployment Rate 4.1% 4.1%
15.00 USD Revised UoM Consumer Sentiment 95.0 94.4
19.30 USD Fed Member Williams Speaks