- The upward momentum of sterling was halted yesterday by the 1.14 resistance level. GBP/EUR has encountered resistance as this level several times since it broke below it in June.
- After five consecutive days of sterling gains against the euro, GBP/EUR began Wednesday on the front foot trading a high of 1.1448 before dropping down to close the day very slightly down on the open at 1.1397.
- The initial rally that we saw yesterday morning was the result of the residual upwards momentum from the previous days as well as better than expected manufacturing PMI figure from the UK which came in at 56.3 vs 55.8.
- Sterling also lost some ground on the US dollar yesterday following two consecutive days of gains. GBP/USD lost just over a quarter of percent on the day despite starting well and trading a high of 1.3321 early doors. Despite this, cable has still gained just under 1% in value this week.
- ADP non-farm employment change from the US came in stronger than expected at 235K vs 202K but their ISM manufacturing PMI came in weaker than anticipated at 58.7 vs 59.5.
- Secretary of State for International Trade Liam Fox yesterday said it is reasonable for firms to develop no deal plans but he thinks it is more likely than not to get a Brexit deal.
- Defence Secretary Sir Michael Fallon resigned from his post yesterday amid allegations of inappropriate behaviour. In his resignation letter, he claimed he “fallen short” of standards expected of those in his position.
- The Federal Reserve held rates at <1.25% as expected.
- Australian trade balance data came in better than expected at 1.75B vs 1.42B expected and building approvals m/m also beat expectations at 1.5% vs -0.9%.
- We hear from the Bank of England at 1pm regarding the bank rate and the bank rate votes from the MPC but before that, we have UK construction PMI at 10.30am.
- The Monetary Policy Committee are fully expected to have voted to increase the base rate to 0.5% from 0.25% with 6 members to vote for the increase and 3 members to vote to hold rates.
- At 1.30pm Bank of England Governor Carney will address press in London along with other MPC members and they will talk about the UK inflation report.
- From the US we expected unemployment claims data at 1.30pm along with preliminary non-farm productivity q/q and preliminary unit labour costs q/q.
|Currency Pair||Interbank Rate||% Change on Day|
|Time (GMT)||Region||Data Release||Forecast||Previous|
|13:00||GBP||BOE Inflation Report|
|13:00||GBP||MPC Official Bank Rates Votes||6-0-3||2-0-7|
|13:00||GBP||Monetary Policy Summary|
|13:00||GBP||Official Bank Rate||0.5%||0.25%|
|13:30||GBP||BOE Gov Carney Speaks|
|13:30||USD||Prelim Nonfarm Productivity q/q||2.5%||1.5%|
|13:30||USD||Prelim Unit Labour Costs q/q||0.5%||0.2%|