Newsletter – 4th April 2017

Morning Bulletin


  • Sterling was under pressure for the bulk of yesterday’s trading following the release of weaker than expected Manufacturing PMI data with the reading of 54.2 falling short of the forecasted 55.1.
  • The Pound fell below both the 1.2500 handle versus the US Dollar and the 1.1700 handle versus the Euro, closing the day down around 1.2470 (USD) and 1.1690 (Euro).
  • The afternoon proved more fruitful for the US Dollar following a small beat in expectations for ISM Manufacturing PMI. The reading of 57.2 was just up on the forecasted 57.0.
  • The South African Rand continues to get battered (Only word for it I’m afraid) in FX space following President Zuma’s controversial sacking of Finance Minister Gordhan last Friday. Yesterday evening those losses were compounded as rating agency S&P cut South Africa’s credit rating to junk status and maintained their negative outlook for the country.
  • Speaking yesterday, FOMC member and Philly Fed Governor Harker said he believed a total of three rate hikes in 2017 would be appropriate and the right call. Harker added whilst he didn’t want the Fed to rush ahead, he also doesn’t want them to fall behind the curve.
  • Other Economic Data of note:
    • Canadian RBC Manufacturing PMI 55.5 (54.7 Exp)
    • US Construction Spending m/m 0.8% (1.0% Exp)


  • Reserve Bank of Australia hold benchmark Cash Rate at1.50%. Whilst this decision was expected the slightly more dovish tone in the accompanying RBA statement has put the Aussie Dollar on the back-foot in FX space.
  • Australian Trade Balance 3.57Bn (1.75Bn Exp)
  • New Zealand NZIER Business Confidence falls to one year low with a reading of 17 (28 previously) for Q1 2017. However a reading greater than zero still represents optimism.
  • Spanish Unemployment Change better than expected this morning, down 48.6K (-41.2K Exp).


  • Not a huge amount of data set for release today. Key this morning will be UK Construction PMI at 9.30am with a reading of 52.5 Expected. Should the actual reading fall short of the mark we may see a repeat of yesterday’s Sterling sell-off when UK Manufacturing disappointed.
  • This afternoon Canadian and US Trade Balance data will be in focus at 1.30pm followed at 3.30pm with ECB President Draghi who is due to speak.
  • Today is a Chinese Bank Holiday.
Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1669 -0.29
GBP/USD 1.2435 -0.40
EUR/USD 1.0658 -0.10
AUD/USD 0.7568 -0.45


Time (GMT) Region Data Release Forecast Previous
09.30 GBP Construction PMI 52.5 52.5
10.15 AUD RBA Gov Lowe Speaks
13.30 CAD Canadian Trade Balance 0.7Bn 0.8Bn
13.30 USD US Trade Balance -46.0Bn -48.5Bn
15.00 USD Factory Orders m/m 1.0% 1.2%
15.30 EUR ECB President Draghi Speaks
TBC NZD GDT (Dairy) Price Index 1.7%