Newsletter – 30th April 2018

Morning Bulletin

Friday

  • Sterling took yet another leg lower Friday morning as key UK data continues to disappoint and makes the prospect of a May rate hike less and less likely. The UK saw growth of just+0.1% in the first quarter of 2018, that was the slowest rate of growth since 2012 and down on +0.4% registered in the final quarter of 2017. Whilst it might be easy to assume the extreme weather could have been an overriding factor in the slowdown, the ONS stated that had a ‘relatively small’ impact on the economy.
  • The Pound plummeted in FX space following the data. GBP/EUR was trading with a 1.1500 handle before the print but traded as low 1.1379 shortly after, eventually trading to a day’s low of 1.1356. It was the same story against the US Dollar, having been trading just shy of the 1.3900 handle the Pound was sold aggressively to 1.3800, trading down to a day’s low of 1.3747 around Midday before stabilizing.
  • In stark contrast to the disappointing UK release, US GDP came in better than expected Friday afternoon albeit down considerably on the 2017 Q4 print. Measured in an annualised format, the GDP print for Q1 2018 was 2.3%, that was up on the 2.0% expected but far lower than the 2.9% growth seen following Q4 2017.
  • US Revised UoM Consumer Sentiment 98.8 (98.0 Exp)
  • The US Dollar index rallied to a fresh 3-month high Friday afternoon, aided by the fall in the Pound and the weakening Euro.
Overnight

  • German Retail Sales m/m -0.6% (0.8% Exp)
  • China Manufacturing PMI 51.4 (51.3 Exp)
  • China Non-Manufacturing PMI 54.8 (54.6 Exp)
  • New Zealand ANZ Business Confidence -23.4 (-20.0 Previous)
Today
  • Nothing in the way of high impact data due today.
  • However there are a couple of prints out of Europe this morning, followed by a raft of US data releases later this afternoon.
  • Worth noting today is a bank holiday in China and Japan.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1348 -0.04
GBP/USD 1.3761 -0.10
EUR/USD 1.2121 -0.04
AUD/USD 0.7556 -0.33

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR M3 Money Supply y/y 4.1% 4.2%
10.00 EUR Italian Prelim CPI m/m 0.2% 0.3%
13.30 CAD RMPI m/m 0.6% -0.3%
13.30 USD Core PCE Price Index m/m 0.2% 0.2%
13.30 USD Personal Spending m/m 0.4% 0.2%
14.45 USD Chicago PMI 58.2 57.4
15.00 USD Pending Home Sales m/m 0.6% 3.1%