Newsletter – 4th October 2018

Morning Bulletin

Yesterday

  • Despite the reading of 53.9 falling ever so slightly short of expectations (54.0 Exp) the UK Services sector continued to show strong growth during September according to the IHS Markit survey.
  • Eurozone Retail Sales m/m -0.2% (+0.2% Exp).
  • Eurozone Final Services PMI 54.7 as expected.
  • The Pound performed strongly against the Euro yesterday, climbing from 1.1220 in the morning to close the day up around 1.1268, having briefly traded as high as 1.1286.
  • Speaking yesterday US Fed member Evans said he was quite comfortable with a December rate rise, with inflation improving significantly and toward or just above the Fed’s objective.
  • Addressing the Tory party conference yesterday afternoon, on Brexit, Theresa May said she is not afraid of leaving the European Union without a deal but added it would be a bad outcome for both sides. The PM told her party that they must be the party for everyone, claiming that people needed to know that austerity is now over.
  • US ISM Non-Manufacturing PMI 61.6 (58.0 Exp).
  • US ADP Non-Farm Employment Change 230K (185K Exp).
Overnight

  • Australia Trade Balance 1.60Bn (1.43Bn Exp)
  • Hawkish comments from Fed Chair Powell overnight. Powell suggested US interest rates may need to go past ‘neutral level’, but that they are still probably still a long way away from that neutral level at present. Powell also said the US economy was experiencing a remarkably positive set of economic circumstances, with little risk to knocking the current expansion off course.
  • According to reuters the UK might have to plough more money into the EU budget before it leaves the bloc. The UK has committed to honour liabilities and debt assumed by the EU until the end of 2020 under the draft Brexit Bill. A figure of £39Bn had been estimated, but that could be set to rise as EU debts continue to mount.
Today
  • Quiet on the data front this morning.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1279 +0.02
GBP/USD 1.2967 +0.25
EUR/USD 1.1495 +0.15
AUD/USD 0.7074 -0.37

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Housing Equity Withdrawal q/q -6.5Bn -6.7Bn
12.30 USD Challenger Job Cuts y/y 13.7%
13.30 USD Unemployment Claims 214K 214K
14.15 USD Fed Member Quarles Speaks
15.00 CAD IVEY PMI 62.3 61.9
15.00 USD Factory Orders m/m 2.2% -0.8%