According to a preliminary release the British GDP in the 3rd quarter contracted by a 0,4% q-o-q, stunning market observers anticipating a 0,2% rebound. A precise breakdown is yet to be released but we already known that a downturn continues in both industry and services. The release reignited a talk of further monetary expansion right after the market turned around pricing in a halt to further bond purchase increases (and sending the pound much higher). The GDP release signaled that a reversal on the GBPUSD came too soon and sent the pair back to 1,6250-1,63 with a potential for further declines (even back to 1,57).
While the British GDP release had powerful influence on the pound, they left other major markets nearly intact. This will not happen, if the surprise comes from the US GDP advance release scheduled for Thursday. Expectations for the figure are high, as the GDP showed signs of stabilization already in the second quarter – the headline figure was -0,7% annualized but for instance services already expanded by 1,5%. This time the market consensus stands for 3,1% annualized (ca. 0,8% q-o-q) on a hope of restocking and further expansion in services. With a traditionally high surprise potential in the data and a tense situation on both major stock indices and the EURUSD, the week looks interesting, especially as the calendar contains some more interesting figures as well (Conference Board on Tuesday, durable orders on Wednesday, UM index on Friday). While the EURUSD managed to climb slightly above the 1,50 psychological barrier, further advances are subject to the 1,0 level on the USDCHF and this one remains firm.
As for the stock markets, the S&P500 seems to be locked in a 1070-1100 range and Friday’s sell off was mostly caused by an inability of the bulls to break an above mentioned resistance (despite solid Microsoft’s results and decent US home sales). This range trading keeps other major indices in a waiting room and stocks a speculation on this week’s data.
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Przemysław Kwiecień  |
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