6 Nov 2013
Flash: GBP outperforming on release of better than expected data - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the pound has outperformed following the release of the stronger than expected UK services PMI report for October.
Key Quotes
“The report revealed economic growth has likely strengthened further still in early Q4 with Markit noting that the composite PMI reading is consistent with quarterly real GDP surging by 1.3% in Q4. The survey also signaled that employers in the service sector were hiring staff at the fastest rate since May 1997.”
“The report is likely to prompt the BoE to raise their real GDP projection for 2013 towards 1.5-1.6%, which if robust growth is sustained into next year may prompt consensus expectations for real GDP growth in 2014 to be raised further towards 2.6% from 2.2% at present.”
“The unemployment rate is also more likely to reach the BoE’s threshold in 2015 than in 2016. However with the first BoE rate hike still appearing some way off the pound will still likely struggle to strengthen materially in the near-term.”
Key Quotes
“The report revealed economic growth has likely strengthened further still in early Q4 with Markit noting that the composite PMI reading is consistent with quarterly real GDP surging by 1.3% in Q4. The survey also signaled that employers in the service sector were hiring staff at the fastest rate since May 1997.”
“The report is likely to prompt the BoE to raise their real GDP projection for 2013 towards 1.5-1.6%, which if robust growth is sustained into next year may prompt consensus expectations for real GDP growth in 2014 to be raised further towards 2.6% from 2.2% at present.”
“The unemployment rate is also more likely to reach the BoE’s threshold in 2015 than in 2016. However with the first BoE rate hike still appearing some way off the pound will still likely struggle to strengthen materially in the near-term.”