Morning Report: 28 March 2018

March 28, 2018

GBP Sterling struggled against almost the entire G10 yesterday morning, before staging a late recovery late on. Politically in the UK, the “Leave” campaign from the Brexit referendum is under pressure, after it was revealed that they channelled large amounts of funds into a company that controversially used data from social media to influence the outcome of the vote. This use of social media to target specific voter bases has become a particularly hot topic in recent months, after it was discovered that Russian nationals may well have influenced the US election in a similar way. Furthermore, the amount funnelled into this company are at odds with Electoral Commission rules. Today at 11:00 GMT CBI Realized Sales are released.

USD After weakening on Monday USD found its legs yesterday and rallied, although there were few obvious catalysts for the move aside from reduced trade tensions. This morning’s news includes a potential diplomatic breakthrough in talks with North Korea, after North Korean dictator Kim Jong Un visited Beijing, and was quoted by local state media as confirming openness to ending its nuclear programme. Yesterday’s data included a miss for the CB Consumer Confidence survey and for the Richmond Manufacturing Index. Today’s calendar is somewhat more eventful, with the final revision to Q4 Gross Domestic Product released at 13:30 GMT alongside the Goods Trade Balance and Wholesale Inventories.

EUR Euro lost ground yesterday against JPY, CHF and USD in a mood which was marked by lessened worries about an imminent global trade war. German Import Prices for February didn’t help the single currency much either, as they unexpectedly shed 0.6%. The Import Price Index for the Eurozone has been steadily declining since February 2017, indicating that the stronger euro holds back inflation stemming from imported goods. This morning German Gfk Consumer Climate remained near multi-year highs with a score of 10.9.

CAD The loonie had a choppy session yesterday and eventually lost some value against USD, while the moves on the rest of the G10 currencies were mixed. Canada’s data calendar was empty yesterday, which also goes for today’s calendar.

UK news

  • Financial Times: Kim Jong Un confirms summits with US and South Korea North Korea’s Kim Jong Un has confirmed he will hold summits with the leaders of the US and South Korea and would consider abandoning his nation’s controversial nuclear weapons programme.
  • Reuters: Britain will deploy all capabilities to defeat enemies – May Prime Minister Theresa May will warn those “who seek to attack us” that Britain will deploy all its capabilities to defeat them, in a national security review to be published on Wednesdayaddressing new, modern-world threats.
  • Wall Street Journal: Tech Shares Tumble Again as Regulatory Risks Rattle Investors Technology stocks are suffering one of their worst beatings in years, as investors reassess a sector that has been considered the growth engine of the global economy but now faces the prospect of greater regulatory scrutiny.