- The UK’s services sector had a welcome boost in February with a PMI reading of 51.3 surpassing the 50.0 expected. Representing the biggest part of the UK economy, businesses in the sector appeared more optimistic about conditions than economists had forecast, however the survey’s authors did warn against interpreting the reading too positively with new orders and employment being impacted by Brexit uncertainty.
- Eurozone Retail Sales were bang in-line with expectations at 1.3% in January, bouncing back from a decline of -1.4% in December.
- The Bank of England took aim at their European counterparts at the ECB yesterday morning. The BOE suggested that whilst they had been active in ensuring the UK financial system could withstand the volatility that a no-deal Brexit could bring about, their counterparts across the channel had been less so and as a result it is the EU that could face the biggest hit from a no-deal outcome.
- Sterling endured a pretty miserable start to trading yesterday and by midday was towards the bottom of the G10 pile, with GBP/EUR slipping to a day’s low of 1.1565 and GBP/USD briefly dipping below the 1.3100 level. However the Pound did fight back over the course of the afternoon regaining pretty much all those losses by the close of play. The catalyst was comments from BOE Governor Mark Carney as he suggested markets might not currently be pricing in a steep enough path for potential rate hikes in the future.
- The US Dollar rallied aggressively yesterday afternoon following the release of and impressive ISM Non-Manufacturing PMI reading.
- The Non-Manufacturing print is a survey of businesses in the US service sector, and the reading rocketed to 59.7 in February. That represented a 3-month high and comfortably beat the 57.4 expected, potentially indicating that the recent lull in the US economy might be lifting.
- The Aussie Dollar is suffering losses in FX space this morning following a much weaker than expected GDP print. The data showed the Australian economy grew by just +0.2% in the final quarter of 2018, that was less than half the +0.5% growth that had been expected.
- Compounding the weakening of the Aussie, we also heard from Reserve Bank of Australia Governor Lowe overnight who essentially ruled out any possibility of an interest rise this year.
- The Aussie is currently down -0.50% against Sterling, with the pair currently trading at 1.8690.
- Against the US Dollar the Aussie is down -0.75%, trading at 0.7031.
- According to US Fed Member Kashkari the best thing the central bank can do is to keep the expansion and avoid the risk of screwing it up by raising rates unnecessarily.
- No data set for release this morning.
- This afternoon the Bank of Canada’s interest rate decision and accompanying statement will be headline at 3pm, but there are also a number of key Canadian and US economic data releases from 1.30pm.
|Currency Pair||Interbank Rate||% Change on Day|
|Time (GMT)||Region||Data Release||Forecast||Previous|
|12.15||GBP||BOE Member Cunliffe Speaks|
|13.15||USD||ADP Non-Farm Employment Change||190K||213K|
|15.00||CAD||BOC Overnight Rate||1.75%||1.75%|
|15.00||CAD||BOC Rate Statement|
|17.00||USD||Fed Member Williams Speaks|