EUR/GBP Fundamental Analysis – October 8, 2015 – Forecast

Analysis and Recommendations:

The EUR/GBP dipped 53 points to trade at 0.7350 as the euro eased today. The pound gained after both industrial and manufacturing production both beat forecast.  UK manufacturing output climbed in August, according to figures released this morning, helping to take total industrial production its highest since 2011.  However, both manufacturing and industrial output are struggling to reach pre-recession levels.

Total factory output climbed 0.5 per cent in August compared with July, the Office for National Statistics said. Industrial production, which is manufacturing plus mining and quarrying and makes up 15 per cent of the economy, rose one per cent.

Oil and gas extraction jumped 8.7 percent in August, the biggest monthly increase since February last year. The figure was boosted by seasonal-adjustment factors, as the usual August shutdowns took place to a lesser degree this year. Many happened in July instead, earlier than normal.

Similar factors bolstered vehicle production by 8.8 percent, with factories staying open in August. Overall transport equipment rose 4.6 percent, the biggest monthly gain since January 2011.

Taking a look at economic events, German Industrial Production posted a sharp decline of 1.2%, way off expectations. Later in the day, we’ll get a look at US Crude Oil Inventories. The markets are keeping a close look at some key releases on Thursday – US Unemployment Claims and the Federal Reserve Policy Meeting Minutes.

German manufacturing numbers have had a rough week. First, Factory Orders posted a decline of 1.8%, the worst showing in eight months. This was followed by Industrial Production, which recorded a decline of 1.2%. These weak numbers underscore growing concern that the global slowdown is affecting Germany, which is the Eurozone’s largest economy and the economic locomotive of the continent.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Thursday, October 8, 2015

Government Bond Auctions

Date Time Country

Oct 07 11:30 Germany Eur 4bn Aug 2025 Bund

Oct 07 16:30 Sweden Announces details of auction on 14 Aug

Oct 07 19:00 US Holds 10-year note auction

Oct 08 11:03 Sweden Holds I/L bond auction

Oct 08 17:30 Italy Announces details of BTP/CCTeu on 13 Oct

Oct 08 19:00 US Holds 30-year bond auction