Newsletter – 7th June 2018

Morning Bulletin

Yesterday

  • The Euro was given a welcome lift yesterday morning following comments from a number of ECB members about the prospect of finally bringing to an end their unprecedented QE programme, with discussions likely to occur at next week’s ECB Governing Council meeting. Comments included:
    • Praet: Market expectations of an end to QE by the end of this year are up for discussion, and that will be discussed next week.
    • Weidmann: Market expectations of an end to the QE programme by the end of this year are plausible.
    • Knot: It would be reasonable to announce an end to the QE programme soon.
  • The transatlantic trade war appears to have stepped up a notch with the European Union preparing to slap 25% duties on up to 2.8 Billion Euros of US Exports from July. The EU is retalliating to what it believes are illegal actions from the US regarding the steel and aluminium tariffs.
  • There were a number of data releases out of North America yesterday afternoon, some of the more high impact figures included:
    • Canadian Trade Balance -1.9Bn (-3.4Bn Exp)
    • US Trade Balance -46.2Bn (-50.0Bn Exp)
    • Canadian Building Permits m/m -4.6% (-1.0% Exp)
  • Reports suggest President Trump is planning a confrontational approach with World Leaders at a summit in Quebec on Friday. It is expected that he will confront them on what he believes is a global economic system that is tilted against the United States.
  • Speaking yesterday afternoon Bank of England Member Ian McCafferty said the BOE was in no rush to start winding down their QE programme, isntead the focus was on getting interest rates a little higher than at present. He said having rates a little higher would allow the BOE to hike or cut in the future if economic circumstances required it.
Overnight

  • Canadian PM Justin Trudeau has rejected the United States moves to try and negotiate NAFTA on a bilateral basis, with the PM preferring to stay the course with trilateral negotiations.
  • Australia Trade Balance 0.98Bn as expected
  • Swiss Unemployment Rate 2.6% as expected
  • German Factory Orders m/m -2.5% (0.7% Exp)
  • French Trade Balance -5.0Bn (-5.1Bn Exp)
Today
  • Pretty quiet on the data front today.
  • US Unemployment Claims probably the headline print at 1.30pm.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1385 -0.05
GBP/USD 1.3462 +0.38
EUR/USD 1.1825 +0.44
AUD/USD 0.7652 -0.19

 

Time (GMT) Region Data Release Forecast Previous
09.00 EUR Italian Retail Sales m/m 0.2% -0.2%
10.00 EUR Eurozone Revised GDP q/q 0.4% 0.4%
13.30 USD Unemployment Claims 223K 221K
15.30 CAD BOC Financial System Review
16.00 GBP BOE Member Ramsden Speaks
16.15 CAD BOC Gov Poloz Speaks