Newsletter – 5th November 2018

Morning Bulletin


  • There was a welcome increase in output in the UK construction industry according to figures Friday morning with a rebound in Civil Engineering the main driver. The Construction PMI reading rose to 53.2 in October, the second highest in the last 16 months and up from 52.1 in September.
  • Having seen a marked recovery on Wednesday and Thursday on renewed hopes of a Brexit deal, the Pound was in consolidation mode for most of Friday, not really making or losing any ground versus it’s major currency counterparts.
  • Slightly mixed economic data out of Canada Friday afternoon. The economy did create a further 11,200 jobs during October, however that was down on the 12,700 expected but proved enough to see the overall unemployment rate drop to 5.8% (5.9% was forecast). Released at the same time the Canadian Trade Balance dissapointed with imports outweighing exports to the tune of -0.4Bn. A trade surplus of +0.2Bn had been expected.
  • The US Dollar was one of the best performers in FX space Friday afternoon following the release of solid jobs data. Whilst average hourly earnings m/m and the overall unemployment rate were in-line with expectations at 0.2% and 3.7% respectively there was a massive beat on expectations for job creation. The Non-Farm employment change figure showed the economy created 250,000 jobs in October, smashing the 194,000 expected.
  • Despite the ongoing trade war and the raft of tariffs imposed on China by President Trump, the United states ran a record high trade deficit against China in September. The overall level of US imports also hit an all-time record high of $266.6Bn during September.
Over The Weekend

  • According to the Sunday Times UK PM Theresa May has clinched a Brexit deal that would allow the whole of the UK to remain in a customs union with the EU in order to protect the Irish Border. The rumored agreement would also include an ‘exit clause’ to appease pro-Brexit MP’s, whilst a Canada-style free trade agreement would remain open as an option.
  • The Sunday Times again report that Theresa May will be meeting with her cabinet on Tuesday to discuss the plan.
  • Speaking overnight Bank of Japan Governor Kuroda ruled out any near-term hike in interest rates, stating that raising rates now would only add to the burden on financial institutions which could risk derailing the country’s economic recovery.
  • China Caixin Services PMI 50.8 (52.9 Exp)
  • Spanish Unemployment Change 52.2K (20.4K Previous)
  • UK Services PMI is the only high impact print this morning due at 9.30am.
  • This afternoon we will hear from Bank of Canada Gov Poloz at 1.10pm, his comments could impact Canadian Dollar pairs.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1417 +0.14
GBP/USD 1.2983 +0.17
EUR/USD 1.1379 -0.07
AUD/USD 0.7196 -0.03


Time (GMT) Region Data Release Forecast Previous
09.30 GBP Services PMI 53.4 53.9
09.30 EUR Sentix Investor Confidence 9.9 11.4
13.10 CAD BOC Gov Poloz Speaks
14.45 USD Final Services PMI 54.7 54.7
15.00 USD ISM Non-Manufacturing PMI 59.3 61.6