Newsletter – 7th January 2019

Morning Bulletin


  • Sterling ended the week on the front-foot Friday, with the most notable gains coming against the US Dollar and the Euro. Sterling hit a 2019 high of 1.1180 against the Euro having opened the day just shy of 1.1100. Whilst against the Dollar the Pound rallied by around a cent, from a low of 1.2650 to close the day just shy of 1.2750.
  • There was a sharp decline in Inflation in the Eurozone during December according to the CPI print Friday morning. Annual Inflation dropped to 1.6% from a reading of 1.9% in November. The main cause of this decline was a sharp slowdown in energy prices.
  • There was some impressive Jobs data out of Canada Friday afternoon. The overall Unemployment Rate held steady at its 43-year low of 5.6% despite expectations it may rise to 5.7%. The economy also added 9,300 jobs in December; that was much better than the 6,800 expected.
  • The main event Friday afternoon was of course the US Non-Farm payrolls print and it showed that the US economy had added an impressive 312,000 jobs in December. That smashed the 180,000 expected and meant during 2018 the US economy had enjoyed its biggest increase in hiring in three years. Average Hourly Earnings also beat expectations with a 0.4% rise in December. The only slight disappointment, despite the bumper new jobs print, saw the overall unemployment rate rise to 3.9% from 3.7% previously.
  • Speaking Friday afternoon Fed Chair Jerome Powell assured markets and investors that the Fed were listening carefully to market risk concerns. He also added that recent inflation data was not raising any concerns over inflation and that the Fed would be patiently watching how the economy evolves. Powell also added that despite all the recent criticism from President Trump, he has had no direct contact from the White House and would not resign if asked.
  • The Chinese central bank slashed the reserve requirement ratios (RRR) for banks on Friday in a bid to support the economy following recent signs of a slowdown.

  • Speaking on the Andrew Marr show yesterday, UK PM Theresa May warned that the UK faces uncharted territory if MP’s reject her Brexit deal. With the UK set to leave the EU on the 29th March, a vote on Mrs May’s Deal is set to take place next week, and in defiant mood as ever the PM said she would redouble her efforts to win MP’s round.
  • According to the Society of Motor Manufacturers and Traders (SMMT) UK car sales have fallen for the second year in a row. The SMMT reported that 2.36 million new cars were registered during 2018, down some 7% on the previous year.
  • German Retail Sales m/m 1.4% (0.4% Exp)
  • Germany Factory Orders m/m -1.0% (-0.2% Exp)
  • Quiet start to the week on the data front.
  • US ISM Non-Manufacturing PMI will be the key print due at 3pm.


Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1130 -0.33
GBP/USD 1.2739 +0.15
EUR/USD 1.1444 +0.41
AUD/USD 0.7134 +0.29


Time (GMT) Region Data Release Forecast Previous
09.30 EUR Sentix Investor Confidence -2.0 -0.3
10.00 EUR Eurozone Retail Sales m/m 0.2% 0.3%
15.00 CAD IVEY PMI 58.1 57.2
15.00 USD ISM-Non Manufacturing PMI 59.6 60.7