Newsletter – 5th October 2017

Morning Bulletin

Yesterday

  • There was some brief respite for the Pound yesterday morning as the third and final UK purchasing manager’s index this week posted a better than expected print. Having seen both the construction and manufacturing elements disappoint, yesterday’s Services PMI came in at 53.6, bettering the 53.2 expected.
  • Similarly there was a slight beat for the Eurozone Services PMI at 55.8 (55.6 Exp).
  • There was a surprise fall in Eurozone Retail Sales during August, with sales down -0.5% against an expected rise of +0.3%. That was the second month in a row that sales have declined.
  • The Reserve Bank of India kept rates on hold at 6% as expected.
  • US ADP Non-Farm Employment Change data was largely in-line with expectations with 135,000 private sector jobs created in September (131,000 Exp). This was the weakest month of hiring in the US since October 2016, however that can in part be apportioned to Hurricanes Harvey and Irma hitting the jobs market.
  • Following the 13-year high reported earlier this week for the US ISM Manufacturing PMI reading, it was perhaps no surprise yesterday’s ISM Non-Manufacturing PMI reading also smashed expectations at 59.8. This was the highest reading since August 2015, and far exceeded the 55.5 that has been forecast.
  • Having slipped during the morning’s trading these two US economic prints underpinned a decent recovery for the US Dollar Index into the afternoon and evening.
Overnight

  • The Aussie Dollar is on the back-foot in FX space this morning following a steep -0.6% decline in Retail Sales for the month of August. Growth of +0.3% was expected.
  • Australian Trade Balance 0.99Bn (0.88Bn Exp).
  • Swiss CPI m/m 0.2% as expected.
  • The UK Daily Telegraph has reported PM Theresa May could be gone by Christmas as there is a plot to oust her after yesterday’s ‘disastrous’ speech, with 30 MP’s on board.
  • The Bank of England’s Dep Gov Woods has urged politicians in the UK and EU to strike a deal on a transitional arrangement by Christmas, warning firms will need to start preparations for a ‘cliff-edge’ scenario otherwise.
  • Sterling is on the back-foot in trading this morning. There is no obvious root cause for this decline at present.
Today
  • All the action comes this afternoon with a raft of US and Canadian Economic data due for release, kicking off with US Unemployment Claims at 1.30pm.
  • We also have four central bankers on the wires later this afternoon, two from the US Fed and two from the Bank of England.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1202 -0.52
GBP/USD 1.3189 -0.42
EUR/USD 1.1772 +0.12
AUD/USD 0.7831 -0.38

 

Time (GMT) Region Data Release Forecast Previous
09.10 EUR Eurozone Retail PMI 50.8
12.30 EUR ECB Monetary Policy Meeting Accounts
13.30 CAD Trade Balance -2.6Bn -3.0Bn
13.30 USD Unemployment Claims 266K 272K
13.30 USD Trade Balance -42.7Bn -43.7Bn
14.10 USD Fed Member Powell Speaks
15.00 USD Factory Orders m/m 1.0% -3.3%
15.00 USD Fed Member Harker Speaks
17.00 GBP BOE Member McCafferty Speaks
18.30 GBP BOE Member Haldane Speaks