Fundamental Analysis 27-10-2016

GBP STRENGTHENS AS FIRST POST BREXIT GDP SET FOR RELEASE
Today sees the release of the UK`s Prelim GDP q/q which is expected to post a significant drop to 0.3% compared to the previous print of 0.7% in the wake of Brexit. The GDP figure is the broadest measure of economic activity and the primary gauge of the health of the UK`s economy as it measure the growth of output. This combined with the fact that this is the first in the series of GDP releases in the UK and not to mention the first since the infamous Brexit vote, it is most likely to impact markets significantly. A print that beats the expectation of 0.3% will bode well for the pound as markets price in the resilience of the UK economy and consequently a print which is less than expected will see the pound being driven lower as the market prices in a worse than anticipated damage to the UK economy, post-Brexit.
Today’s key economic releases are as follows:
EUR
M3 Money Supply y/y expected at 5.1%
GBP
Prelim GDP q/q expected at 0.3%
USD
Core Durable Goods Orders m/m expected at 0.2%
Unemployment Claims expected at 261K
Durable Goods Orders m/m expected at 0.1%
Pending Home sales m/m expected at 1.2%
JPY
Household Spending y/y expected at -2.6%
Tokyo Core CPI y/y expected at -0.5%
AUD
PPI q/q expected at 0.6%

 

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