GBP

UK third quarter GDP came in as
expected at 0.8% quarter-on-quarter; with the year-on-year figure unchanged, at
1.5% .Economic growth broadened a little in the third quarter as companies increased
investment – but growth was still driven by consumer spending largely off the
back off cheap credit.

GBP

UK third quarter GDP came in as
expected at 0.8% quarter-on-quarter; with the year-on-year figure unchanged, at
1.5% .Economic growth broadened a little in the third quarter as companies increased
investment – but growth was still driven by consumer spending largely off the
back off cheap credit.

A breakdown of the figures
shows household spending was up 0.8% quarter-on-quarter while industrial output
rose 0.6% on the quarter. Initially the market’s reaction was fairly muted and
the pound fell slightly. There was then an uncharacteristic delayed response
that saw GBPUSD surge to the highest level since Jan 2013. The market then
pulled back around 3pm off its highs to close 0.5% higher at the end of the UK
trading day after positive US data.

USD

We saw
mixed data in the afternoon from the US. Durable
goods orders fell 2.0% month-on-month in October – this was
worse than the expected 1.9% contraction. Firms may have held back on
placing orders for expensive equipment while they waited to see if the US would
default on its debt obligations. 

The
good data came in from the job market as the number of new claims for jobless
benefits made last week fell to 316,000 down from 326,000 in the previous seven
days. The four-week average of new claims also improved, suggesting the job
market has picked up pace. 

The
Chicago purchasing manager’s index for November came in higher than
expectations at 63 above the 60 level expected. Michigan consumer confidence
sentiment for November also came in higher at 75.1 above consensus and last
month’s data. 

Today

With the Thanksgiving holiday
there is no US data due out today.

We could see some movement in
the euro with the German unemployment rate to come in at 6.9% and Eurozone
consumer confidence data being released in the morning. In the afternoon
Germany is also releasing its inflation data – this is expected to come in
slightly higher at 1.3% compared with 1.2% last month.

From the UK, the Bank of
England’s financial policy committee will release its latest assessment of the
UK economy and Mark Carney will be holding a press conference. Investors will
be looking for any hawkish comments from the Governor to continue to drive the
pound higher.

Key
Announcements:

10.00am – EUR – Consumer Confidence (Nov): Expected to
worsen to -15.4.

10.00am – EUR – Economic Sentiment Indicator (Nov):
Expected to improve marginally to 98.

10.00am – EUR – Services Sentiment (Nov): Expected to
improve to -3.5.

10.30am – GBP – Financial Stability Report.

13.00pm – EUR – German Consumer Price Index (Nov): Expected
to rise to 1.3%.