Newsletter – 30th June 2017

Morning Bulletin

Yesterday

  • Sterling continued to strengthen yesterday. Hot on the heels of Bank of England Governor Mark Carney suggesting that the BOE may need to start raising rates soon, monetary policy committee member Andy Haldane, who voted for rates to remain unchanged last time around, signaled his readiness to vote for a rate increase.
  • Haldane said that he is ready to vote for an increase ‘relatively soon’. This gives a good insight into the MPC as Haldane is thought of as being towards the dovish end of the spectrum.
  • This gave an already buoyant sterling more momentum and we saw GBP/USD push right up to 1.30 which has been a key level since the market fell below this in October of last year. Cable opened at 1.2922 and closed at 1.3004 representing a 0.63% increase on the day.
  • GBP/EUR didn’t rally as hard as GBP/USD but we still posted a very small gain on the day. The market closed at 1.1365 after trading a high of 1.1388 and opening at 1.1360.
  • We saw mixed inflation data from Europe with German prelim CPI m/m coming in better than expected at 0.2% vs 0.0% and Spanish Flash CPI y/y coming in weaker than expected at 1.5% vs 1.6% expected.
  • Yesterday afternoon, final GDP q/q came from the US came in better than expected at 1.4% vs 1.2% expected and US unemployment claims fell inline at 244K.
Overnight
  • Overnight ANZ business confidence from New Zealand came in at 24.8.
  • GBP/NZD, GBP/AUD and GBP/JPY are trading this morning at 1.7734, 1.6929 and 145.48, respectively.
Today
  • Sterling has pushed on another quarter of a percent against the euro this morning but has dropped below 1.30 against the US dollar.
  • This morning we had German retails sales beat expectations coming in at 0.5% vs 0.3% expected and we also saw the UK current account coming at -16.9B which is better than the estimated figure of -17.2B.
  • At 10am we have CPI flash estimates y/y from the Eurozone before GDP m/m data from Canada and personal spending m/m from the US at 1.30pm.
  • This afternoon we expected Chicago PMI data at 2.45pm before BOC business outlook survey from Canada at 3.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1389 +0.21
GBP/USD 1.2985 -0.15
EUR/USD 1.1400 -0.33
AUD/USD 0.7673 -0.11

 

Time (GMT) Region Data Release Forecast Previous
10:00 EUR CPI Flash Estimate y/y 1.2% 1.4%
13:30 CAD GDP m/m 0.2% 0.5%
13:30 USD Personal Spending m/m 0.1% 0.4%
14:45 USD Chicago PMI 58.1 59.4
15:30 CAD BOC Business Outlook Survey