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Pound shrugs off poor Gross Domestic Product data

Published: Monday 26 February 2018

  • Sterling recovers after poor Gross Domestic Product data
  • USD weakened by higher oil prices but data awaits
​​By David Johnson

Sterling appears to have shrugged off the poor GDP data of last week and is pressing higher again. News that the Prime Minister’s meeting at Chequers was successful (dependent on who you believe) has given the Pound a bit of levity and a lack of heavyweight data early in the week has allowed that levitation to continue. We will get a speech from the Bank of England (BoE) Deputy Governor today but we’ll have to wait until Wednesday and Thursday to see if the data matches the markets positive view of the Pound. A variety of manufacturing and industrial data releases plus mortgage and credit data will keep things lively and the week ends with a key note speech by the Prime Minister on Brexit progress. Sterling has made gains against the USD and Euro.
The Euro has gained against the USD as well. This is a week heavy with EU data and of course, the Brexit thing continues to rumble on in the background. This week brings unemployment, business and consumer confidence indices and a slew of other data for the Eurozone. Volatility is as inevitable as road closures, school closures and train cancellations as the snow from Siberia gets to the UK.
The US data this week will be dominated by the 2nd estimate of economic growth for Q4. There is a good chance that will be an upbeat report and the USD, which has been weakened by improved oil prices, will strengthen before the week is out.
We are expecting to see a slowdown in Canada’s economic growth data when the December’s Gross Domestic Product (GDP) numbers are released on Friday. It is unclear whether we will get US and Canadian employment reports on Friday but those too will cause volatility if they are published this week.
And the winter Olympics are over; no more curling fixes over breakfast; no more head scratching as you try to work out what a backside 720 with a chicken salad grip actual is. We’ll have to contend ourselves with rugby but, being English; I am really not ready to discuss Saturday yet. Ouch.
High in the mountains
A young dude walks into a bar and says “Hey, you guys wanna hear a great snowboard joke?”

The bartender says, “I’m a snowboarder. The guy on your right is a snowboarder. Same with the guy on your left, and the guy behind you.”

So the dude says, “It’s all good guys. I’ll tell it really slowly. “

Today's Major Economic Releases

Market BST Data/Event Previous Expected
EUR 13:00 European Central Bank President Draghi Speaks    
USD 15:00 US: New Home Sales 625k 655k
NZD 21:45 New Zealand: Trade Balance 640m -2,710m

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