Newsletter – 7th September 2017

Morning Bulletin

Yesterday

  • Yesterday proved solid for Sterling with the Pound making marginal gains against most of its major counterparts. GBP/EUR was largely unmoved closing the day around 1.0940, whilst GBP/USD closed up around 1.3055, a gain of 0.20% on the day.
  • The Canadian Dollar was by far the biggest gainer during the day’s trading following an unexpected hike in benchmark interest rates from the Bank of Canada. Largely expected to be left on hold at 0.75%, the BOC opted to hike rates 25 basis points to 1% adding that recent economic data had surpassed their forecasts, which supported the BOC’s view that growth in the country had become more broad-based and self-sustaining.
  • GBP/CAD closed the day down 1.05% at 1.5953; USD/CAD was down 1.29% at 1.2217; whilst EUR/CAD closed down 1.08% at 1.4579.
  • Speaking yesterday morning, German Finance Minister Schaeuble urged the ECB to get back to normal monetary policy as he believes the Eurozone’s economic recovery is now strong enough to support the move.
  • US ISM Non-Manufacturing data fell just short of expectations at 55.3 (55.8 Exp).
  • The Atlanta Fed GDPNow model cut US 3rd Quarter growth to +2.9% from a previous +3.2% (This figure is reported in an annualized format).
Overnight

  • The US House of representatives approved $8Bn in disaster aid for Hurricane Harvey.
  • President Trump has also agreed with Senate Democrats to a 3-month extension of the debt limited that will fund the government through to the 8th December.
  • The Catalonia Parliament has approved an independence referendum to take place on the 1st October. The Spanish Government has however vowed to outlaw the vote.
  • Australia Retail Sales m/m 0.0% (0.2% Exp)
  • Australia Trade Balance 0.46Bn (0.93Bn Exp)
  • German Industrial Production m/m 0.0% (0.6% Exp)
  • UK Halifax HPI m/m 1.1% (0.2% Exp)
Today
  • The ECB’s rate decision and accompanying press conference will be front and centre this afternoon and is arguably the key event of the week.
  • The ECB is expected to keep rates at 0.00% but as always it is the press conference at 1.30pm which will cause FX markets to shift.

 

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.0929 -0.08
GBP/USD 1.3033 -0.06
EUR/USD 1.1936 +0.17
AUD/USD 0.9786 -0.14

 

Time (GMT) Region Data Release Forecast Previous
10.00 EUR Eurozone Revised GDP q/q 0.6% 0.6%
12.45 EUR ECB Minimum Bid Rate 0.0% 0.0%
13.30 EUR ECB Press Conference
13.30 USD Unemployment Claims 245K 236K
13.30 CAD Building Permits m/m 2.2% 2.5%
15.00 CAD Ivey PMI 61.3 60.0