Newsletter – 4th September 2018

Morning Bulletin

Yesterday

  • Economic data was very thin on the ground yesterday as the US and Canada observed the Labour Day bank holiday.
  • The Pound, already on the back-foot following Brexit commentary from  both Michel Barnier and Theresa May over the weekend, was further weakened Monday morning as Manufacturing data dissapointed. The PMI survey revealed the UK’s manufacturing sector expanded at its weakest pace in over two years, with the reading of 52.8 falling short of the 53.9 expected.
  • Sterling declined sharply in FX space following the data with GBP/EUR falling below the 1.1100 handle and GBP/USD falling below 1.2900. That set the tone for the day as the Pound continued to slip even further as the day went on.
  • According to a spokesman for UK PM May the Bank of England Governor Mark Carney still intends to step down in 2019 despite calls for him to stay on an additional year in order to steady the ship post Brexit.

Overnight

  • According to a Reuters poll of economists, there is a 25% chance that Britain will leave the European Union without a deal in March 2019.
  • The Reserve Bank of Australia kept interest rates on hold at 1.50% overnight, citing a lack of inflationary pressure to be able to justify a hike in rates.
  • UK BRC Retail Sales Monitor y/y 0.2% (1.2% Exp)
  • Australia Current Account -13.5Bn (-11.1Bn Exp)
  • Spanish Unemployment Change 47.0K (35.2K Exp)
Today
  • UK Construction PMI is the key print this morning due at 9.30am.
  • Sterling could also shift during the Bank of England’s Inflation report hearings which kick off at 1.15pm.
  • Later this afternoon US ISM Manufacturing PMI will be the key print.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1091 +0.10
GBP/USD 1.2832 -0.29
EUR/USD 1.1570 -0.40
AUD/USD 0.7180 -0.44

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Construction PMI 54.9 55.8
10.00 EUR PPI m/m 0.3% 0.4%
10.30 AUD RBS Gov Lowe Speaks
13.15 GBP Infltaion Report Hearings
14.30 CAD Manufacturing PMI 56.9
14.45 USD Final Manufacturing PMI 54.5 54.5
15.00 USD ISM Manufacturing PMI 57.6 58.1
TBC NZD GDT Price Index -3.6%