- Sterling enjoyed a solid day in FX space yesterday following much better than expected data regarding the UK economy.
- UK GDP rose +0.3% m/m in July, easing many fears that the economy could fall into a technical recession following the -0.2% decline in Q2. Driven largely by the UK services sector the +0.3% increase exceeded the modest +0.1% that had been forecast.
- There was also a far better than expected Manufacturing Production print in July with m/m growth of +0.3%. A decline of -0.3% had been forecast.
- The Pound rallied aggressively following the better than expected data and continued to strengthen over the course of the day.
- GBP/USD had been trading in the Mid-1.2200’s prior to the data, but rallied to a near 7 week high of 1.2383 shortly after, before settling in the Mid-1.2300’s.
- It was a similar story where GBP/EUR was concerned with the rate jumping from the low to Mid-1.1100’s prior to the data to a near 7-week high of 1.1229 shortly after. The rate did however slump back into the Mid-1.1100’s during the afternoon and into the close.
- The House of Commons speaker John Bercow announced his resignation in front of MP’s in the commons yesterday afternoon. Bercow, who has become somewhat of a celebrity of late with Brexit drawing so much more attention on the commons, was visibly emotional as he made the announcement. Whilst many on the back benches and in the opposition speak highly of Bercow, he has also come under serious fire from many in the Conservative party who feel he has overstepped the mark and acted without impartiality during the Brexit debate.
- UK Parliament begins its 5 week suspension today. Following Boris Johnson’s hugely controversial decision, the prorogation will see activities in the House of Commons cease until the 14th October with just a few weeks remaining before the current Brexit deadline of the 31st October.
- Prior to the suspension coming into force, UK PM Boris Johnson saw his attempts to call a general election thwarted for the second time as 303 MP’s abstained from the vote. The PM required 434 votes in order to succeed but fell comfortably short with just 293 votes in favour of the motion.
- US Consumer Credit m/m 23.3Bn (16.2Bn Exp)
- China CPI y/y 2.8% (2.6% Exp)
- French Industrial Production m/m 0.3% (0.5% Exp)
- UK average earnings headlines this morning at 9.30am.
|Currency Pair||Interbank Rate||% Change on Day|
|Time (GMT)||Region||Data Release||Forecast||Previous|
|09.30||GBP||Average Earnings Index 3m/y||3.7%||3.7%|
|11.00||USD||NFIB Small Business Index||103.6||104.7|
|13.30||CAD||Building Permits m/m||2.1%||-3.7%|
|15.00||USD||JOLTS Job Openings||7.31M||7.35M|