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Yesterday

  • The Pound dropped to a near 2-month low against the Euro yesterday as prolonged Brexit talks between the UK Government and the Labour party still appear to be heading for failure. GBP/EUR traded as low as 1.1503 in the morning, before closing the day modestly higher at 1.1525 which still represented a -0.19% decline on the day.
  • Similarly GBP/USD fell to a 2-week low of 1.2907, before closing the day at 1.2923 which was down -0.25% on the day.
  • Employers in the UK continued to shrug of Brexit concerns with the overall Unemployment Rate dropping to 3.8% according to figures released by the ONS yesterday. That was below the 3.9% forecast and represented the lowest level of unemployment since early 1975.
  • UK average wage growth did however disappoint in the January to March period, with total earnings including bonuses rising by 3.2% on an annual basis, that was down from 3.5% in the three months to February.
  • German investor confidence dipped unexpectedly in May as the escalating trade war between the United States and China impacted the growth outlook for Europe’s largest economy. The ZEW print was at -2.1 (Below 0 represents pessimism), that was down from a positive reading of 3.1 in April.
  • Eurozone Industrial Production m/m -0.3% as expected.
  • US Import Prices m/m 0.2% (0.7% Exp)
  • Speaking yesterday afternoon President Trump said that China would likely act to cut their interest rates in order to make up for the business they will be losing due to US import tariffs. The President took the opportunity to once again try and influence US Federal Reserve policy, suggesting the US would win should the Fed act in the same manner and cut rates.
Overnight

  • Sources are reporting trade talks between the United States and China broke down due the Chinese Government effectively ripping up 30% of the original draft trade deal. Following 5-months of long and arduous negotiations a 150-page document had been compiled, however China returned to Washington with a greatly reduced 105 page document having torn up the other 45. This is believed to have angered President Trump and hence the increased import tariffs came into effect this month.
  • Theresa May plans to put her Brexit Deal before Parliament for a fourth time in early June regardless of whether or not the Government has reached a compromise with the Labour party.
  • Australia Wage Price Index q/q 0.5% (0.6% Exp)
  • China Industrial Production y/y 5.4% (6.5% Exp)
  • China Retail Sales y/y 7.2% (8.6% Exp)
  • German Prelim GDP q/q 0.4% as expected
Today
  • Eurozone GDP data is the key print this morning.
  • This afternoon there is a raft of economic data out of North America, with Canadian Inflation and US Retail Sales headlining at 1.30pm.

MAJOR CURRENCY PAIRS
Current at time of distribution

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1516 -0.01
GBP/USD 1.2916 +0.10
EUR/USD 1.1214 +0.10
AUD/USD 0.6925 -0.26

 

ECONOMIC CALENDAR
Current at time of distribution
Time (GMT) Region Data Release Forecast Previous
10.00 EUR Eurozone Flash GDP q/q 0.4% 0.4%
13.30 CAD CPI m/m 0.4% 0.7%
13.30 USD Retail Sales m/m 0.2% 1.6%
13.30 USD Empire State Manufacturing Index 8.2 10.1
14.15 USD Capacity Utilization Rate 78.7% 78.8%
14.15 USD Industrial Production m/m 0.0% -0.1%
15.00 USD Business Inventories m/m 0.0% 0.3%
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