Newsletter – 31st May 2017

Morning Bulletin

Yesterday

  • Sterling lost ground on the other major currencies excluding the US dollar yesterday as fresh YouGov analysis predicted that the Conservatives could lose their majority in parliament based on constituency-based modelling.
  • Sterling opened at 1.1500 against the euro and traded as high as 1.1549 before the YouGov analysis was released and then we saw GBP/EUR come off to trade down towards its recent low of 1.1440.
  • The latest ICM poll still has Theresa May in the lead by 12 percentage points at 45% but this narrowing lead is certainly weighing on the pound.
  • Against the US dollar, sterling gained some value after opening at 1.2839 and closing slightly higher at  1.2857 after CB consumer confidence from the US came in weaker than expected at 117.9 vs 120.1.
  • Senior German FinMin official Schuknecht said at a conference yesterday that ECB is not applying rules, favours weak countries and he sees ‘serious governance problems’.
Overnight
  • Governor Wheeler of the RBNZ said they are watching house price inflation very carefully stated that they are still concerned about house price inflation despite is coming off in recent months.
  • China Mfg PMI comes in unchanged at 51.2 which beats expectations of 51.0.
Today
  • We have UK net lending data from the UK at 9.30am before CPI flash estimate y/y and core CPI flash estimate y/y at 10am.
  • FOMC member Kaplan speaks in New York at 1pm before we see Canadian GDP m/m at 1.30pm.
  • Following that we expect the release of Chicago PMI at 2.45pm and US pending home sales m/m at 3pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1440 -0.05
GBP/USD 1.2796 -0.47
EUR/USD 1.1180 -0.03
AUD/USD 0.7447 -0.23

 

Time (GMT) Region Data Release Forecast Previous
09:30 GBP Net lending to individuals m/m 4.5B 4.7B
10:00 EUR CPI Flash Estimate y/y 1.5% 1.9%
10:00 EUR Core CPI Flash Estimate y/y 1.0% 1.2%
13:00 USD FOMC Member Kaplan Speaks
13:30 CAD GDP m/m 0.3% 0.0%
14:45 USD Chicago PMI 57.0 58.3
15:00 USD Pending Home Sales m/m 0.7% -0.8%