Newsletter – 4th January 2019

Morning Bulletin

Yesterday

  • Cabinet ministers have been told that EU leaders are likely to provide assurances to Theresa May over her Brexit deal. The Prime Minister hopes that clarification over the Irish backstop will come in before a vote on her withdrawal agreement on January 15th or 16th. (The Times)
  • A poll of Conservative Party members released yesterday showed more than have half Tory MPs would prefer to leave the EU  with no deal than under the terms of PM May’s deal.
  • The flash crash in sterling yesterday morning which saw GBP/EUR and GBP/USD print lows of 1.0988 and 1.2373, respectively has been been blamed on Apple’s profit warning. The world’s most valuable company revised their profit projections and analysts speculated that investors rushed to less risky assets such as the Yen in holiday-thinned markets. (PoundSterlingLive).
  • GBP/EUR opened at 1.1109 and closed down 0.14% at 1.1093. Cable opened at 1.2604 and closed up 0.22% at 1.2632.
  • US President Donald Trump held an unannounced press briefing yesterday to reiterate his hard-line border wall stance amid an ongoing partial government shutdown. He answered no questions from reporters.
  • China and the US are set to hold trade talks in Beijing on January 7th/8th.
  • From the US ADP non-farm employment change came in better than expected at 271K vs 179K expected. ISM manufacturing came in worse than anticipated at 54.1 vs 57.7.
Overnight
  • GBP/AUD, GBP/NZD and GBP/JPY are trading 1.8008, 1.8928 and 136.80, respectively.
  • From China, Caixin Services PMI came in better than expected at 53.9 vs 52.9.
Today
  • This morning we expect net lending to individuals m/m data from the UK along with services PMI. At 10am we have CPI flash estimates from the Eurozone.
  • Then this afternoon we expect employment data from Canada and the US with non-farm payrolls expected to come in at 179K.
Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1105 +0.11
GBP/USD 1.2680 +0.38
EUR/USD 1.1417 +0.21
AUD/USD 0.7040 +0.51

 

Time (GMT) Region Data Release Forecast Previous
09:30 GBP Net lending to individuals m/m 4.9B 5.0B
09:30 GBP Services PMI 50.7 50.4
10:00 EUR CPI flash estimates y/y 1.8% 2.0%
10:00 EUR Core CPI flash estimates y/y 1.0% 1.0%
13:30 CAD Employment Change 6.8K 94.1K
13:30 CAD Unemployment Rate 5.7% 5.6%
13:30 CAD RMPI m/m 0.4% -2.4%
13:30 USD Average hourly earnings m/m 0.3% 0.2%
13:30 USD Non-farm employment change 179K 155K
13:30 USD Unemployment Rate 3.7% 3.7%