Newsletter – 6th November 2017

Morning Bulletin

Friday

  • UK Services PMI was the key print Friday morning, and the much better than expected reading of 55.6 (53.3 Exp) gave the Pound a welcome bit of support in FX space following it’s collapse the previous day (following Bank of England). It also meant all three PMI readings (Construction, Manufacturing, Services) last week bettered expectations with the three industries all in expansionary territory.
  • Speaking Friday morning Bank of England Dep Gov Ben Broadbent reiterated that the bank may need to raise interest rates two more times in order to get inflation back towards their 2% target, however he also stressed this was not a promise, nor could it ever be, and was based on all things in their forecasts coming to pass, which invariably they won’t.
  • US Jobs data was firmly in focus Friday afternoon, with Non-Farm Employment Change being the most closely watched. It did initially disappoint with only 261,000 jobs being created in October, falling well short of the 312,000 expected, however that shortfall was slightly cushioned as the previous month’s loss of 33,000 jobs was revised to a creation of18,000.
  • US wage growth also dissapointed in October, showing earnings were flat (0.0%) against an expected rise of 0.2%.
  • Despite job creation falling below expectations the overall US Unemployment Rate dropped to 4.1% (4.2% Previously), representing a new 17 year low.
  • There was key Canadian data released Friday afternoon and in contrast to the US, the Canadian economy saw greater job creation but also an increase in the unemployment rate:
    • Employment Change 35,300 (15,300 Exp)
    • Unemployment Rate 6.3% (6.2% Exp)
Over The Weekend

  • Speaking Friday evening US Fed Member Kashkari suggested the Central Bank should now hold off raising interest rates until there are clear signs that inflation is rising.
  • According to BOE Gov Carney, should the UK get a bad Brexit deal, the central bank would be unable to cut interest rates due to inflationary pressures.
  • New Zealand Inflation Expectations q/q 2.0% (2.1% Previous)
  • Australia MI Inflation Gauge m/m 0.3% (0.3% Previous)
  • German Factory Orders m/m 1.0% (-1.0% Exp)
Today
  • Typically quiet Monday where economic data is concerned.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1282 +0.17
GBP/USD 1.3096 +0.16
EUR/USD 1.1607 0.00
AUD/USD 0.7649 +0.03

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR Eurozone Final Services PMI 54.9 54.9
09.30 EUR Sentix Investor Confidence 31.2 29.7
10.00 EUR Eurozone PPI m/m 0.4% 0.3%
15.00 CAD Ivey PMI 60.2 59.6
17.10 USD US Fed Member Dudley Speaks