Morning Report: 20 February 2018

February 20, 2018

GBP Sterling had a quiet day yesterday, weakening against both the euro and US dollar. Today, Brexit Secretary David Davis will attempt to reassure business leaders in Austria with a speech due at 09:45 GMT. The pre-release of the text from the speech indicates that Davis will set out a variety of industry aims, though the phrase catching the media headlines has been his ‘reassurance’ that the UK leaving the European Union would not lead the country to descend in to a “Mad Max-style world borrowed from dystopian fiction”. Davis will also set out the UK’s ambition for mutual regulatory recognition between the EU and UK, something of a holy grail for UK financial services firms looking to continue business as usual. The Confederation of British Industry will release its Industrial Order Expectations index at 11:00 GMT.

EUR EURUSD traded flat yesterday in an uneventful session, although the eurozone’s Current Account recorded a smaller than expected surplus in December. This morning’s data flow is significantly more eventful, with the widely followed ZEW Economic Sentiment Survey due for release at 10:00 GMT, and the Eurogroup of finance ministers meeting throughout the day. German Producer Prices have already been released this morning and rose 0.5% in January, marking seven straight months of expansion.

USD The United States Enjoyed the Presidents Day holiday yesterday, and USD drifted slightly higher against most major partners. Fixed income yields are once again rising, with the widely followed 10 year treasury continuing on it’s path towards the psychologically significant 3% level. No headline US data will be released today.

CAD The loonie weakened yesterday and remains on the back foot this morning, while crude oil prices have remained flat since the start of the week. Today at 13:30 GMT monthly Wholesale Sales data will be released.

UK news

  • Telegraph: David Davis dismisses ‘dystopian’ Brexit theory as Brussels starts new Project Fear with cancer warning. Brussels has launched its own version of Project Fear by suggesting British workers will be at a higher risk of cancer as a result of Brexit.
  • Reuters: UK manufacturers say they urgently need clarity on Brexit. British manufacturers urgently need clarity on whether the country will clinch a Brexit transition period to smooth its departure from the European Union, the head of a body representing the industry will say on Tuesday.

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