UK’s Latest NIESR GDP Estimate Awaited
After a brief lull, yesterday, the British economic calendar appears to be overly active today. First out, a report by UK’s mortgage lender Halifax showed that growth in British house prices rose in line with investor expectations. The just released data showed that UK’s industrial, as well as manufacturing production, surprisingly dropped in October. Further ahead, the NIESR gross domestic product (GDP) estimate for three months to November is scheduled to be released in a few hours.
On the other side of the English Channel, the Eurozone economy looks to be in a wait-and-see mode ahead of the European Central Bank’s (ECB) monetary policy meeting tomorrow. One of the few data releases to cross the wire today is German industrial production, which advanced at a less than anticipated pace in October. Later, the US economy will spring into focus with weekly mortgage applications and JOLTS job openings data.
Pound Sterling – UK Markets
The Pound is trading on a weaker footing against its major peers this morning. It witnessed a sharp drop after the just out data showed that UK’s manufacturing production unexpectedly fell, while total industrial production further declined for October. Separately, Britain’s Halifax house prices slightly rose in November, after posting a robust gain in September. Later in the day, the NIESR GDP estimate for three months ended November will come into focus, as it is a reliable indicator for actual GDP growth. So far, the indicator has remained steady, posting two straight gains of 0.4%. Meanwhile, the UK Supreme Court’s hearing on the government’s Brexit appeal has entered Day-3 today.
Yesterday, Sterling briefly hit a 2-month high against the greenback, after British Chancellor, Philip Hammond acknowledged that Britain might keep “paying in” to the European Union as a way of retaining access to the single market.
US Dollar – US Markets
The US Dollar strengthened against its major peers yesterday, as investors turned more optimistic regarding prospects of an increase in the federal funds rate by the US Federal Reserve (Fed) at their meeting next week. On the data front, new orders for US factory goods posted its largest increase since June 2015 in October. Additionally, the final reading on durable goods orders registered a rise in October. Further, the final print for nonfarm productivity confirmed its flash estimates for the third quarter of 2016, which marks a sharp rebound from the second quarter and registered the fastest pace of growth in 2 years. Meanwhile, the nation’s trade deficit widened beyond market expectations in October, amid falling soybean, gold and artwork exports, along with rising demand for imported goods such as medicine, cell phones and clothing.
Going ahead, traders will look forward to today’s US economic releases including consumer credit data, MBA mortgage applications along with JOLTS job openings which is anticipated to show a slight increase in jobs created for October.
Euro – European Markets
The shared currency is trading in positive territory against the greenback and the Pound this morning. Earlier in the session, data indicated that Germany’s seasonally adjusted industrial production rebounded in October. However, the reading suggests that the Eurozone’s powerhouse economy started the final quarter of this year on a weaker footing. Meanwhile, data from the French customs showed that the nation’s trade deficit widened in October, as exports dipped, whereas imports held up firm. In contrast, French current account deficit narrowed in October. Tomorrow, the ECB is scheduled to hold its monetary policy meeting and is widely expected to decide on extending its bond purchase programme.
Yesterday, the Euro ended weaker against the US Dollar. On the data front, the Eurozone’s final reading of GDP confirmed its preliminary estimate for the third quarter.
Other Currencies – Highlights
The Kiwi Dollar has managed to claw back up against the greenback this morning. During the previous session, results from the latest Global Dairy Trade auction showed that prices of whole milk powder rose, as the total volume of dairy products sold on the platform declined. It was the eighth gain in nine auctions, reflecting a decline in supply. Separately, the Reserve Bank of New Zealand Governor, Graeme Wheeler appeared before the finance and expenditure select committee to answer questions based on the annual review of the bank. He stated that inflation in New Zealand is expected to reach the central bank’s target band by the fourth quarter and added that the economy is performing relatively well. Looking ahead, there are no significant economic data-points scheduled in New Zealand during the latter part of this week.
In other news, New Zealand witnessed a fresh bout of uncertainty earlier during the week after New Zealand Prime Minister, John Key, shockingly resigned. Next week, the National Party caucus will meet to elect a new Prime Minister.