arrow
logo

Alvexo - Giving Back To The Community

Learn More

UK Growth in Focus

Markets Awaiting the Results of UK Economic Activity Post-Referendum

shutterstock_442717669


The first glimpse into how the UK economy is coping in the aftermath of its vote to exit the European Union will be available Thursday, when figures for quarterly gross domestic product are released. The advance figures will give a window into how the economy is performing considering an outlook that is full of uncertainty.

Third Quarter UK Growth May Surprise


There was an abundance of fear after the vote to leave the European Union that the UK economy would struggle to perform.  However, as data has shown in the last few months, the UK has weathered the storm better than expected.  The consensus forecast among economists is for the UK to have exhibited 0.30% growth during the third quarter. This figure coincides with the estimate from the Bank of England, which last month raised its growth forecast for the third quarter from 0.10% to 0.30%.  If that number materializes, it should provide some much needed boost for the FTSE 100 equity index and the Pound. Nevertheless, the economic outlook over the medium to long-term continues to be fragile considering the increased risk that the UK will lose access to the European single market. The Pound is under pressure heading into the announcement, with EURGBP moderately higher on the session.

popup_close
1-eurgbpdaily10272016

Deutsche Bank Reports Surprise Profit


Amid a stormy environment for the bank, Deutsche Bank announced an unexpected profit on Thursday.  The predominant factor behind the gains was the lender’s falling litigation and restructuring costs for the quarter. Net income for the third quarter stood at EUR 278 million, easily topping the analyst expectations of a net loss of EUR 610 million. Despite the positive results, investors remain concerned about the outlook for the bank, especially considering the hefty fine handed down by the US Department of Justice.  The legal action taken by the US could cost the bank billions, potentially derailing the bank’s turnaround plans.  Furthermore, the bank’s capital position would be threatened by an outflow of that magnitude, a development that continues to weigh on shares.  In spite of the positive earnings results, shares have tumbled by over -40.00% year-to-date as the financial services giant’s outlook becomes more hazardous.

popup_close
2-dbdaily10272016

Dollar Rally Shows No Pause


The US Dollar is holding ground against a three month high in the yen, as increased odds of a year-end Federal Reserve interest rate hike underpin the greenback.  The US dollar was last trading at 104.49 Yen. The USDJPY pair rallied as high as 104.695 during the session, close to the three-month high of 104.875 reached earlier in the week. With the Japanese central bank likely to keep monetary policy and interest rates on hold over the medium-term, US policies will continue to be the main driver of the pair’s momentum.  According to the most recent data from the FedWatch tool offered by CME Group, the market is currently pricing a 74.00% chance of the Federal Reserve lifting rates by December.  Should this transpire, the ongoing dollar rally could see upside gains accelerate over the medium-term.

popup_close
3-usdjpydaily10272016

Industrial Profits Slow in China


Chinese industrial firms recorded a slowing profit growth last month, indicating that the recent signs of stabilization in the world’s second largest economy may be premature. Profits rose 7.70% in September to CNY 577.1 billion, decelerating sharply from August's rapid 19.50% jump according to data from the National Bureau of Statistics on Thursday. The biggest drawdown came from sectors like steel, electricity and electronics. The growth pace recorded in August was the fastest in three years, indicating the unevenness of the data.  Some analysts however refused to take the dismal September figures too seriously. Several recent data points suggest that China's economy is stabilizing, as increased governmental spending offsets the weakness in exports. However, spare industrial overcapacity remains a drag and should be monitored for fresh signs of a slowdown.  In the meantime, the USDCNY pair reached a new record during the Asian session before pulling back modestly.

popup_close
4-usdcnhdaily10272016

Upcoming Events

  • Time
  • Currency
  • Event
  • Forecast
  • Previous
  • 8:30 GMT
  • GBP
  • Advance GDP QoQ (3rd Quarter)
  • 0.30%
  • 0.70%
  • 8:30 GMT
  • GBP
  • Advance GDP YoY (3rd Quarter)
  • 2.10%
  • 2.10%
  • 12:30 GMT
  • USD
  • Core Durable Goods Orders MoM (September)
  • 0.20%
  • -0.20%
  • 12:30 GMT
  • USD
  • Durable Goods Orders MoM (September)
  • 0.10%
  • 0.10%
  • 14:00 GMT
  • USD
  • Pending Home Sales MoM (September)
  • 1.20%
  • -2.40%
  • 23:30 GMT
  • JPY
  • Household Spending YoY (September)
  • -3.00%
  • -4.60%
  • 23:30 GMT
  • JPY
  • National Core CPI YoY (September)
  • -0.50%
  • -0.50%
  • 23:30 GMT
  • JPY
  • National CPI YoY (September)
  • -0.50%
  • -0.50%