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UK GDP Numbers in Focus

Markets Mixed as Yen Gains Lead Off the Week

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Today’s main events include the UK’s initial estimates the third quarter GDP followed by US durable goods orders and services PMI data. EURUSD managed to trim some of its declines from last week closing at 1.1050 after prices previously declined to 1.1000, a 10-week low.

New Zealand Trade Deficit Swells

The trade deficit for New Zealand was recorded at over NZD$1 billion for a second month in a row in September, posting a larger than expected decline. The trade deficit comes as exports broadly declined by over 8.00% with dairy export volumes dragging the figure down by nearly 12.00%. Although the GDT price index has managed to rebound, it is only expected to be reflected in November’s trade data. Imports also declined by 5.50% mostly on account of lack of any large imports. The NZDUSD currency pair has been trading sideways after prices briefly hit the highs of 0.6870 earlier in October. The Reserve Bank of New Zealand’s upcoming interest rate decision is due on October 28th with expectations calling for the RBNZ to hold rates steady and keep monetary policy unchanged.

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Yen Rallies on BoJ Uncertainty

The Japanese Yen is up 0.71% against the US Dollar and is currently the strongest currency for the week. The Bank of Japan is due to meet this Friday on the 30th of October with expectations divided as some analysts call for the BoJ to announce its expansion of the quantitative and qualitative easing program. The BoJ's Governor, Haruhiko Kuroda, has remained optimistic that inflation would reach the bank's 2.00% target rate by fiscal year 2017 and has so far refrained from expanding the BoJ's massive bond purchase program this year. USDJPY has remained broadly flat after prices briefly touched 125.85 and has trended within a horizontal range ever since. USDJPY attempted to break its range last week, intact since August, but prices reversed the gains with USDJPY currently trading at 120.56.

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Preliminary UK GDP Ahead

The third quarter preliminary United Kingdom GDP estimates are due for release today at 09:30 UK time. Estimates point to a slowdown in the UK's economic activity to 0.60% from 0.70% previously with some analysts expecting to see GDP declining to as low as 0.50% on a quarterly basis in light of the lack of growth in the UK services sector which has been a strong contributor to domestic expansion hitherto. GBPUSD managed to close on a bullish note yesterday at 1.5348, marking the first bullish close in nearly 4 sessions. However, connecting the trendline off the highs from August 24th through September 17th, GBPUSD looks to have broken the trendline and managed to find support on a retest of 1.5300. If this dynamic support holds, GBPUSD could potentially attempt to rally higher towards 1.5460 while to the downside, a decline could see Cable test previous support at 1.5210.

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Apple Earnings Ahead

Apple is due to deliver its quarterly earnings report this week for the fourth quarter of 2015 after the closing bell of the American cash equity session. Expectations are for Apple's earnings per share to print at $1.88 while revenues are forecast to rise 21.20% year over year. Apple has managed to recover after hitting a yearly low to $92.00 in August of this year following the brief global equity rout. Nevertheless, concerns about the company’s future continue to linger amid the Apple Watch disappointment and other lackluster product announcements. Shares in Apple closed at $115.15 yesterday and the technical charts point to a possible rally back towards resistance levels sitting between $131.00 and $132.00 which has held up so far this year provided support at $112.20 holds firm.

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Upcoming Events

  • Time
  • Currency
  • Event
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  • Previous
  • 09:30 GMT
  • GBP
  • GDP (QoQ)
  • 0.60%
  • 0.70%
  • 09:30 GMT
  • GBP
  • GDP (YoY)
  • 2.40%
  • 2.40%
  • 12:30 GMT
  • USD
  • Core Durable Goods Orders (MoM)
  • 0.10%
  • -0.20%
  • 12:30 GMT
  • USD
  • Durable Goods Orders (MoM)
  • -1.20%
  • -2.30%
  • 13:00 GMT
  • USD
  • S&P Case Shiller Home Price Index (YoY)
  • 5.10%
  • 5.00%
  • 14:00 GMT
  • USD
  • CB Consumer Confidence (October)
  • 103.00
  • 103.00