Newsletter – 4th October 2017

Morning Bulletin

Yesterday

  • On what was an incredibly sparse day of data, a disappointing UK Construction PMI print kicked off yesterday’s trading, the figure of 48.1 fell some distance short of the expected 51.1 and represented the first dip below industry expansion (50.0) since September 2016.
  • With little to no other data releases, this print put Sterling under pressure throughout the day’s trading, although losses were fairly limited.
  • There was a surprise beat on Eurozone PPI with the print for August showing producer prices had risen +0.3%, much better than the +0.1% expected.
  • Speaking before the European Parliament, the EU’s Brexit negotiator Barnier told MEP’s that the remaining 27 EU member states would not pay for Britain’s decision to exit the bloc, stating they would pay ‘no more, no less’. He also again reiterated insufficient progress had been made on Brexit talks and that serious divergences remained.
  • The New Zealand Global Dairy Trade Index saw a dip yesterday, with the index showing average prices were down-2.4% on the two weeks prior.
Overnight

  • The British Retail Consortium Index revealed shop prices fell-0.1% year-on-year in September, however this reading is the closest to seeing inflationary pressure in four years; the last time the index showed inflation, at +0.4%, was back in May 2013.
  • Addressing the Spanish media yesterday evening, Spanish King Felipe chastised Catalonia’s pro-independence government, accusing them of ‘inadmissable disloyalty’ to the state’s insititutions.
  • The World Bank has raised China’s growth forecast:
    • 2017: +6.7% up from +6.5%
    • 2018: +6.4% up from +6.3%
  • New Zealand ANZ Commodity Prices m/m +0.8% (-0.8% Prior)
Today
  • UK Services PMI is the key print this morning; following weak manufacturing and construction PMI numbers already this week which have kept the Pound on the back-foot.
  • This afternoon look out for US Employment data at 1.15pm and US manufacturing at 3pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1270 -0.06
GBP/USD 1.3251 +0.12
EUR/USD 1.1757 +0.12
AUD/USD 0.7855 +0.27

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR Eurozone Final Services PMI 55.6 55.6
09.30 GBP Services PMI 53.2 53.2
10.00 EUR Eurozone Retail Sales m/m 0.3% -0.3%
13.15 USD ADP Non-Farm Employment Change 131K 237K
15.00 USD ISM Non-Manufacturing PMI 55.5 55.3
18.15 EUR ECB President Draghi Speaks