Newsletter – 5th March 2018

Morning Bulletin


  • There was a welcome pick-up in February’s UK Construction PMI with the print of 51.4 bettering the expected 50.5.
  • The highlight of Friday’s trading was UK PM Theresa May’s latest Brexit speech, titled ‘The Road to Brexit’, the key takeaway’s included:
    • Financial services must be included in any future trade deal, however the PM acknowledged some compromises will need to be made during negotiations.
    • ECJ cannot be the ultimate arbiter when the UK leaves the EU.
    • The UK wants to have freedom to negotiate free trade deals around the world, but wants to have friction-less trade with the EU.
    • The PM said existing models (Norway, Switzerland etc) for a relationship with the EU would not work for the UK post-Brexit.
  • Following the PM’s speech, the EU’s chief Brexit negotiator Barnier said he welcomed the further clarity on the UK’s ambitions and that her recognition of ‘trade offs’ would help EU leaders when drafting up their latest guidelines on the Brexit negotiations.
  • The Pound was largely unmoved following the PM’ speech.
  • There wasn’t a great deal of data Friday afternoon:
    • Canadian GDP m/m 0.1% as expected
    • US Revised Consumer Sentiment 99.7 (99.4 Exp)
  • The IMF have said that President Trump’s plans for the US to impose Import restrictions on steel and aluminium are likely to cause damage not just outside of the US but also to the US economy itself.
Over The Weekend

  • The big story overnight and this morning is of course the Italian General Elections, and the exit polls currently indicate there could be a hung parliament. The anti-establishment Five Star Movement (M5S) look set to be the largest single party with between 29%-32% of the overall vote. However a centre-right bloc which includes former PM Silivio Berlusconi’s Forza Italia party could gain the most seats, with polling suggesting this bloc could achieve between 33%-36% of the vote. Both however would fall well short the 316 seats needed to achieve a majority.
  • The Euro weakened ever so slightly in FX space off the back of this exit poll.
  • Australia Building Approvals m/m 17.1% (5.1% Exp)
  • Australia Company Operating Profits q/q 2.2% (1.6% Exp)
  • The German SPD party have voted to join the grand coalition with Chancellor Angela Merkel set for a fourth term in charge.
  • UK services PMI is our key print this morning due at 9.30am.
  • Worth noting we are still awaiting the official result of the Italian elections.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1207 +0.04
GBP/USD 1.3795 -0.03
EUR/USD 1.2309 -0.05
AUD/USD 0.7742 -0.22


Time (GMT) Region Data Release Forecast Previous
09.30 EUR Sentix Investor Confidence 31.1 31.9
09.30 GBP UK Services PMI 53.3 53.0
10.00 EUR Retail Sales m/m 0.3% -1.1%
14.45 USD Final Services PMI 55.9 55.9
15.00 USD ISM Non-Manufacturing PMI 58.9 59.9
18.15 USD FOMC Member Quarles Speaks 0.4% 0.5%