Newsletter – 3rd January 2019

Morning Bulletin


  • Sterling kicked off trading in 2019 pretty much where it had left off in 2018, under pressure and losing ground against its major currency counterparts as Brexit woes continue to weigh on the Pound.
  • In stark contrast the US Dollar surged in FX space, with the greenback in high demand as uncertainty appeared to be the theme in markets following poor economic data out of China and Europe. The Japanese Yen, often seen as the worlds safe haven also benefited.
  • In fact the Pound sustained it’s worst losses against the US Dollar, having opened trading at around 1.2720 the pair closed the day down at 1.2590.
  • UK Manufacturing PMI had a shock beat on expectations yesterday morning, with the reading of 54.2 much better than the 52.5 expected. However the figure wasn’t necessarily that encouraging as it would appear factories have finally started to take preparations ahead of a potential no-deal Brexit, ramping up their stockpiles during December.

  • Spanish Unemployment Change -50.6K (-56.3K Exp)
  • Despite a poll of 1000 Labour voters of which 72% would like to see their Leader back the People’s Vote (Second Referendum), Jeremy Corbyn continues to resist those calls, instead saying yesterday that he would vote against a no-deal Brexit , and vote against Theresa May’s deal and then send the PM back to Brussels to renegotiate a customs union with the EU to secure trade.
  • According to the British Chambers of Commerce, in another potential sign of the economy slowing ahead of Brexit, the UK’s dominant services sector reported the slowest sales in growth in two years during the fourth quarter of 2018.
  • The Aussie Dollar suffered huge losses at one point overnight due to automated selling of the Aussie against the Japanese Yen, which then had a knock on effect for the Aussie against a whole host of other major currencies. It does seem that this was a ‘flash crash’ event however as the Aussie has regained a large chunk of those losses.

  • UK PM Theresa May is due to launch another European charm offensive today, with talks with Merkel, Rutte and Tusk scheduled as the PM seeks ‘clarifications’ that she hopes will help sell her Brexit deal to Parliament.
  • US economic data will be in focus this afternoon, with ADP Non-Farm Employment Change and ISM Manufacturing PMI the key prints due at 1.15pm and 3pm respectively.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1043 -0.66
GBP/USD 1.2566 -0.31
EUR/USD 1.1377 +0.30
AUD/USD 0.6962 -0.31


Time (GMT) Region Data Release Forecast Previous
09.30 GBP Construction PMI 52.9 53.4
12.30 USD Challenger Job Cuts y/y 51.5%
13.15 USD ADP Non-Farm Employment Change 179K 179K
13.30 USD Unemployment Claims 220K 216K
15.00 USD ISM Manufacturing PMI 57.7 59.3