Newsletter – 7th December 2017

Morning Bulletin

Yesterday

  • Very quiet on the data front yesterday morning, but plenty of political news.
  • The Telegraph reported Theresa May is set to face yet enough revolt within her party, this time from within her Cabinet, led by Brexiteers Boris Johnson and Michael Gove as they express “genuine fear” that the PM is trying to force through a soft version of Brexit.
  • Speaking before a panel of MP’s Brexit Secretary David Davis openly and candidly admitted that no Brexit impact studies have been carried out, stating he is not a fan of economic models. He did however say the Government had a major contingency planning operation underway in the event of a no-deal scenario.
  • Ultimately Sterling remained under pressure in FX space yesterday as the Irish Border issue remains up in the air, with some reports suggesting that the DUP are demanding significant changes to the text related to the border and that a deal by the end of this week is unlikely.
  • The key event yesterday afternoon was the Bank of Canada’s rate decision and accompanying statement. As expected the BOC left rates at 1.00%, however whilst they acknowledged in the longer run that rates would need to rise, for now the BOC maintained their cautious stance adding slack still remained within the labour market. The CAD Dollar was hammered in FX space following the release.
  • US ADP Non-Farm Employment Change 190K (189K Exp)
  • Controversially yesterday afternoon US President Trump said it was time for the United States to recognise Jerusalem as the Capital of Israel, further directing his State department to prepare for moving the US embassy to Jerusalem from Tel Aviv.
Overnight

  • The US Senate has voted (51-47) to start talks with the House on striking a deal on a plan to overhaul the US tax system. Republicans are hoping a plan to overhaul the system can be agreed by Christmas.
  • The EU’s Jean-Claude Juncker reportedly fears that should Brexit talks remain deadlocked next week, Theresa May’s Government could collapse.
  • Australia Trade Balance 0.11Bn (1.37Bn Exp)
  • German Industrial Production m/m -1.4% (+0.9% Exp)
  • French Trade Balance -5.0Bn (-4.7Bn Exp)
  • UK Halifax HPI m/m 0.5% (0.2% Exp)
Today
  • Higher impact prints are due this afternoon with US Unemployment Claims headlining.
  • We also have ECB President Mario Draghi speaking at 4pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1344 -0.08
GBP/USD 1.3377 -0.09
EUR/USD 1.1791 -0.03
AUD/USD 0.7522 -0.52

 

Time (GMT) Region Data Release Forecast Previous
10.00 EUR Eurozone Revised GDP q/q 0.6% 0.6%
12.30 USD Challenger Job Cuts y/y -3.0%
13.30 CAD Building Permits m/m 1.7% 3.8%
13.30 USD Unemployment Claims 239K 238K
15.00 CAD IVEY PMI 62.7 63.8
16.00 EUR ECB President Draghi Speaks