German Ifo at record high and UK 3Q GDP beats

GBPUSD, H1                     

German Ifo jumps to new record high, as expectations improved sharply. We had expected a slight improvement in the overall reading as strong orders numbers were likely to boost the expectations number, but in the event the numbers came out even better than we hoped, despite the somewhat disappointing PMI reading and the expectations reading jumped to 109.1 from 107.5, while the current conditions indicator rose to 124.8 from 123.7. The breakdown showed sentiment improving across the board, with the exception of the wholesale trade indicator, which fell back to 17.9 from 19.4. More arguments for the hawkish part of the ECB, although after yesterday’s sharp rise in yields there is not that much more room for further corrections.

Across the English Channel a surprise beat for 3Q UK GDP saw the GBP gain a bid as GBPUSD jumped to 1.3165 and GBPJPY attempted to break 150.00 whilst  EURGBP fell to 0.8940.

Positive data for both the ECB (this week ) and BOE  (next week) to ponder at their upcoming meetings.  



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Stuart Cowell

Senior Market Analyst


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