After a week of scrappy macro-trading – with the German election, a hawkish Janet Yellen and Trump’s tax plan the main drivers of movement – the market gets a good ol’ fashioned data deluge this Friday.
The UK is the site of the most intriguing figures this morning. The second quarter current account deficit is set to come in at £15.8 billion, an improvement on Q1’s £16.9 billion. Then there’s the final Q2 GDP reading, forecast to remain unchanged at a flaccid 0.3%, with net lending to individuals expected to have jumped from £4.8 billion to £5 billion from July to August.
The potentially varying quality of this data, alongside the mixed Brexit messages from David Davis and Michel Barnier yesterday, and news that London house prices have fallen for the first time since 2009, dragged the pound lower after the bell.
Cable fell 0.4%, dipping below the $1.34 mark it kept dancing around on Thursday, while against the euro sterling slipped by the same amount, forcing it away from its recent highs to €1.136. This in turn gave the FTSE enough room to push 25 points higher, causing the index to near 7350 for the first time in over a fortnight. It should be noted that there were similar scenes yesterday morning, only for the pound to overcome its initial losses by the end of the session.
In the eurozone the DAX managed to climb another 35 points, in the process hitting a fresh, 12750-eyeing 3 month high. The main focus for the region this Friday is the flash inflation figure for September, with analysts forecasting a rise from 1.5% to 1.6% month-on-month; if accurate, that could see the euro’s gains against the pound joined by some growth against the dollar.
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