Newsletter – 5th February 2019

Morning Bulletin

Yesterday

  • Investor confidence plummeted to its lowest level in more than four years in the Eurozone during February with the UK’s impending departure from the EU being cited as the major concern. The reading of -3.7 was far worse than the -1.1 expected.
  • The UK’s construction industry also cited Brexit worries as an overriding factor for a slump in the PMI reading in January with the print of 50.6 just about scraping into expansionary territory (>50.0), a reading of 52.6 had been forecast.
  • Sterling was unchanged on the day against the Euro closing at 1.1414.
  • The US Dollar performed well on the day, closing up +0.21% against both the Pound and the Euro at 1.3046 and 1.1430 respectively.
  • German Chancellor Angela Merkel may have given a glimmer of hope to Theresa May whilst speaking yesterday afternoon. Speaking at a news conference Merkel said with creativity and goodwill the UK and EU could still resolve the issue of the Irish Border, however she also added the current withdrawal agreement could not be renegotiated and that any arrangement on the Irish border would have to come under the future relationship.
Overnight

  • Despite the Reserve Bank of Australia providing a rather gloomy assessment of the economic prospects for 2019 the Aussie Dollar has rallied in FX space this morning. The RBA left rates on hold at +1.5% as expected, but in the accompanying statement growth for 2019 was slashed from around +3.5% to +3.0% as the central bank added that downside risks to the economy had increased.
  • Australia Retail Sales m/m -0.4% (0.0% Exp)
  • Australia Trade Balance 3.68Bn (2.25Bn Exp)
  • Shoppers in the UK picked up spending in January according to the latest figures from the British Retail Consortium. Having endured the worst Christmas period in a decade, retailers reported total sales increased by +2.2% on an annual basis in January.
Today
  • Relatively quiet on the data front today.
  • UK Services PMI and Eurozone Retail Sales are the more high impact figures due this morning.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1398 +0.01
GBP/USD 1.3018 -0.14
EUR/USD 1.1420 -0.14
AUD/USD 0.7241 +0.21

 

Time (GMT) Region Data Release Forecast Previous
09.30 GBP Services PMI 51.1 51.2
10.00 EUR Retail Sales m/m -1.5% 0.6%
14.45 USD Final Services PMI 54.2 54.2
15.00 USD ISM Non-Manufacturing PMI 57.2 57.6