GBP/USD Fundamental Analysis October 8, 2014 Forecast

Analysis and Recommendations:

The GBP/USD gained 9 points to trade at 1.6092 after UK manufacturing and industrial production releases. The weak dollar helped the pound stay in positive territory. The Pound’s decline since mid-July has tracked various measures of BOE policy bets including the aforementioned OIS-based gauge as well as front-end UK bond yields. The latest leg of the selloff initiated in mid-September has likewise coincided with the start of an increasingly disappointing run of economic news-flow. In fact, data from Citigroup suggests that on the whole, UK data releases are now underperforming consensus forecasts by the widest margin in a month.

Needless to say, a downturn on the economic data front bodes ill for the hawks on the BOE’s rate-setting MPC committee, who will probably find it that much harder to build a five-vote majority needed to deliver an increase in borrowing costs. That means next week’s monetary policy announcement will likely turn out to be another non-event.

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 actual vs. forecast:

               Cur.                       Event     Actual    Forecast              Previous

                 NZD                    NZIER Business Confidence (Q3)  19%                     32%      

                 AUD                    Interest Rate Decision (Oct)          2.50%    2.50%    2.50%   

                 AUD                    RBA Rate Statement                                                      

                 EUR                    German Industrial Production       -4.0%     -1.5%     1.6%     

                 JPY                      BoJ Press Conference                                                    

                 GBP                     Industrial Production (MoM)         0.0%      0.2%      0.4%     

                 GBP                     Manufacturing Production            0.1%      0.1%      0.3%     

                 CAD                    Building Permits (MoM) (Aug)                     -13.0%  11.8%   

                 USD                    JOLTs Job Openings (Aug)                            4.71M   4.67M  

 

Upcoming Economic Events that you should be monitoring:

               Cur.                       Event     Actual    Forecast              Previous

                 JPY                      Adjusted Current Acct.                  0.19T     0.10T    

                 JPY                      Current Account n.s.a.                   0.198T   0.417T  

                 CNY                    HSBC Services PMI (Sep)               53.8       54.1      

                 JPY                      BoJ Monthly Report                                                      

                 CAD                    Housing Starts (Sep)                       196.0K   192.4K  

                 USD                    FOMC Meeting Minutes                                             

Government Bond Auction

Date Time Country Auction

Oct 08 09:30 Germany Eur 4.0bn Oct 2019 Bobl auction

Oct 08 09:30 Swiss Bond auction (for decision)

Oct 08 15:30 Italy Announces details of BTP

Oct 08 17:00 US 10Y Note auction

Oct 09 09:03 Sweden I/L bond auction

Oct 09 17:00 US 30Y bond auction

Oct 10 09:10 Italy BOT auction