Morning Report: 28 September 2015
28th September 2015 By: Ranko Berich
GBP Sterling starts this week near the absolute bottom of its monthly range against USD, having weakened more than 3% against the greenback since the 18th of September. The bar now seems rather low for any good news to help sterling along, but no important fundamental data will be released until tomorrow’s Money Supply statistics from the Bank of England at 09:30 BST. The rest of the week will see a few more relevant events, including a speech from Bank of England Governor Mark Carney on Tuesday at 20:30 BST, and the latest revision to Gross Domestic Product Growth during the second quarter at 09:30 BST on Wednesday.
EUR The market turmoil and sense of risk aversion that saw the euro strengthen in recent weeks is fading somewhat, and the single currency opens this week noticeably weaker than it was last Monday against USD. Friday’s eurozone Money Supply data showed the important private lending metric rise by 1.0% year on year, as the eurozone’s credit markets recover and consumers gain access to lending. This week will be a busy one in terms of euro data, beginning with tomorrow morning’s German Consumer Price Index releases. After last week’s German Import Price Index showed deflation, any downwards shocks to consumer prices in the eurozone’s most important economy could see the euro react sharply. Eurozone CPI data will be released on Wednesday at 10:00 BST.
USD US strengthened last week, but the most important dollar events were not fundamental data releases. Two important speakers from the US Federal Reserve, Dennis Lockhart and Janet Yellen, heavily suggested in speeches that a majority of voting members are planning to hike interest rates this year if possible. Of course, the decision remains dependent on how the economy unfolds over the coming months, or “data dependent”, as the Fed puts it. This week will see nothing short of a torrent of US data and central bank speakers, beginning with today’s speeches from the rate-setting Federal Open Market Committee’s Tarullo and Dudley at 10:45 and 13:30 BST. Personal Spending and Income data will be released at 13:30, alongside the Personal Consumption Expenditure Price index, the Fed’s preferred inflation measure. Yet more speakers from the Fed are scheduled in the afternoon, with Evans and Williams speaking at 18:30 and 22:00 respectively. The week’s most important release for USD, however, will be the Non-Farm Payrolls report on Friday at 13:30.
CAD Crude oil continues to languish, leaving CAD near the multi-decade lows seen against USD last week. Ample Canadian data will be released this week, but is unlikely to have much upside impact for CAD unless it is truly exceptional. Trade Balance will be released on Tuesday afternoon alongside the Ivey Purchasing Managers Index, and unemployment data will be released on Friday afternoon, as will the Bank of Canada’s latest Business Outlook Survey.
- Reuters. Labour says to launch ‘radical review’ of economic institutions: The Labour Party will launch a “radical review” of the national institutions that manage the economy, including the Bank of England, its finance spokesman will say on Monday.
- Reuters. Polls show UK public closely split over remaining in EU: The gap between Britons who want to remain in the European Union and those who want to leave remains tight ahead of a membership referendum due by the end of 2017, according to two opinion polls on Monday.
- Telegraph. Wages surge as financial services lead jobs recovery: Employers are paying more to hire professionals as the economic recovery powers ahead.
- Telegraph. Britain punches above its weight as business investment climbs to new heights: Britain’s position as one of the most attractive markets to do business will push investment to a record high in the next few years, according to a new report.