Newsletter – 5th June 2017

Morning Bulletin


  • Friday started very positively for Sterling with a blowout UK Construction PMI print of 56.0; representing a 17 month high. Expecting a reading of 52.7, the much better figure reported was atributed to a faster upturn in residential work and solid increases in civil engineering and commercial building.
  • Despite this much better than expected print the Pound was still unable to make any real progress in FX space as the political uncertainty ahead of the General Election dominates.
  • There was a raft of employment releated data released out of the United States Friday afternoon and on the face of it, it appeared pretty mixed. Average hourly earnings m/m was inline at 0.2%, and the official Unemployment Rate was actually slightly better at 4.3% (4.4% Exp), however markets reacted aggressively to the big miss on Non-Farm employment change. 181,000 more people were expected to be in work during May, however the actual print of138,000 fell way short of that number.
  • The US Dollar was sold off aggressively as a result of the Non-Farm component, with the Dollar index plunging from 97.30 just before the print to close the day down at 96.70. Even the Pound managed to strenghten against the Dollar for a period, rallying just above the 1.2900 level, however that proved short lived.
  • Other Data of Note:
    • Canadian Trade Balance -0.4Bn (0.0Bn Exp)
    • Canadian Labour Productivity q/q 1.4% (0.2% Exp)
    • US Trade Balance -47.6Bn (-45.5Bn Exp)
  • US Fed member Harker believes the Fed is on track to hit its inflation target and that the US economy is now “essentially at normal”, going on to reiterate his view that a further two interest rate increases should be sufficient in 2017.
Over The Weekend

  • Sadly once again this morning we come into the office having witnessed another terrorist attack and atrocity on British soil. Our thoughts are with London and all those sadly involved.
  • UK ELECTIONS: As election day quickly approaches there have been a raft of Polls released over the weekend, with the Tory lead narrowing further in a number of them:
    • Survation Poll: Tories 40% vs Labour 39%
    • Comres Poll: Tories 47% vs Labour 35%; worth nothing this poll also showed Theresa May’s personal rating as negative for the first time.
    • ICM/Sun Poll: Tories 45% vs Labour 34%
    • Telegraph/ORB Poll: Tories 45% vs Labour 36%
    • YouGov Poll: Tories 43% vs Labour 38%
  • Australia – Company Operating Profits q/q 6.0% (5.1% Exp)
  • Global Investment Bank, Goldman Sachs, have pushed back their forecasts for when the US Fed will hike rates for a second time this year to December from September.
  • Just the two key figures to look out for today. First up is UK Services PMI at 9.30am with an expected print of 55.1; worth noting both the Construction and Manufacturing PMI’s beat expectations last week.
  • The second, due at 3pm, is US ISM Manufacturing PMI with a reading of 57.1 expected.
  • Please be aware that today is a public holiday in Germany, France and Switzerland.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1426 +0.07
GBP/USD 1.2876 -0.10
EUR/USD 1.1269 -0.10
AUD/USD 0.7470 +0.37


Time (GMT) Region Data Release Forecast Previous
09.00 EUR Eurozone Final Services PMI 56.2 56.2
09.30 GBP Services PMI 55.1 55.8
13.30 USD Revised Non-Farm Productivity q/q -0.6% -0.6%
14.45 USD Final Services PMI 54.1 54.0
15.00 USD ISM Non-Manufacturing PMI 57.1 57.5
15.00 USD Factory Orders m/m -0.2% 0.2%