UK GDP Jan 24

Last Q3, UK GDP came out 0.7% vs 0.6% estimate and boosted GBPUSD up by 75 pips in 3 hours.

Comparing some UK Data
Retail Sales
Jul -0.3%
Aug +0.3%
Sep -0.4%
Q3 = -0.1%
Oct +0.9%
Nov +0.3%
Dec +1.1%
Q4 = +2.3%

Industrial Production
Jul -0.1%
Aug +0.2%
Sep +0.1%
Q3 = +0.4%
Oct +0.2%
Nov -0.8%
Dec +0.5%
Q4 = -0.1%

Manufacturing Production
Jul +0.1%
Aug +0.2%
Sep +0.4%
Q3 = 0.7%
Oct +0.0%
Nov -0.4%
Dec +0.3%
Q4 = 0.7%

In the above data, only UK Industrial Production for Q4 is lower that Q3, but Retail Sales for Q4 increased from -0.1% to 2.3%! In USA GDP, Retail Sales is said to be 70% of GDP. IF we were to gauge UK GDP with the above data, UK GDP should be better than 0.7% as estimated. Of course there are other factors involved in the computation.

According to UK National Statistics Online (http://www.statistics.gov.uk/CCI/nugget.asp?ID=56), the first GDP estimate will be based on Output:

I would love to play this event but the fact that the minutes are coming out simoultaneous has me spooked.

The (unpublished) expectation of the minutes is 6-3.
If anything better than 6-3 would be GBP positive.
Shadow MPC voted 5-4 though.. I wonder if the mnutes is like this..

HI BK
in my view I think it is dangures to straddle this one becasue BOE Meeting minute has strong effect on the price and also with first minute so if it conflict it will be double killer

what do u think...

last thing whice one is most stronger UK GDP or Meeting minute I mean any hope that traders could ignore one of them

take care

GBP/USD is already trading above 1.98, at I beleive is a 14 year high. Last time it passed this mark, a few weeks back, it quickly subsided. I don't think it will break 1.99. The market is already pricing in a rate hike for Britian before March. I think the impact won't be large tommorow, particularly when King said today that he expects inflation to fall sharply and that the BOE acted in advance to prevent high inflation. CBI trends orders were off expectations. Retail sales will boost GDP but manufacturing would have taken a hit with such a high pound. I don't think the GBP will rise much on the data tommorow, as it will take some pretty stellar, knock out of the park data to push the GBP past 1.99 versus the dollar (which I feel it won't deliver, particularly with so much priced into the pound).

where will the minutes be published?

The Bank of England website...

It wouldn't surprise me at all if the decision was unanimous - like the last one. After all, they knew that inflation was at 3% which is only 0.1% away from King having to write a letter to the Chancellor. This will lead to a temporary spike in Cable followed by a big move down.

Hi all,

you'll find BoE minute here http://www.bankofengland.co.uk/publi...2006/index.htm

Thanks for this thread guys !

Have good day.

Larry

why would this just be a temporary spike?

The price action of yesterday and today is very bearish. We've seen a trend reversal which should continue. People will be selling into any rally regardless of the fundamentals (which are expected to be strong anyway).

Solid strategy.

LONDON (AFX) - The pound was well-bid ahead of the Bank of England's the publication of the minutes from its latest rate decision where a surprise quarter point rate hike emerged.

The minutes are expected to a show a 7-2 vote in favour of the hike to 5.25 pct, with market-watchers interested to see where the rate-setters focus lay in making the decision.

A hawkish set of minutes may well propel the pound above the 2 usd level.

Yesterday, the pound hit a high 1.9916 usd, a 14-year high, before easing back slightly.

Today could see a test of the 2 usd psychological barrier, however.

Expectations of hawkish set of minutes are running high after Bank of England governor Mervyn King's speech last night.

Late yesterday, King gave a hawkish speech in the style of the letter he might have to write to the Chancellor of the Exchequer explaining why inflation was above 3 pct.

Also out today, figures from the office of National Statistics are expected to show the UK economy grew by a quarterly 0.7 pct in the fourth quarter of 2006.

That would be the fifth consecutive 0.7 pct rise, which is considered to be at or just above the UK's trend rate.
At 9.22 am GMT, the pound was at 1.97841 usd while the euro wa at 0.6580 stg.

Wow 4 dissenters, now that was a surprise.

Yep, Minutes stole the show

BOEMeeting Minutes 5-4
Exit:+30pips

5-4 for rate hike should be gbp posative no?

No, Unanimous would be positive. 5/4 means they barely got it done and next time chances are slim.

CRAP!

Im the only one who did not made any money on this one!
My long triggered for a loss, my short triggered for a minor win.

Both cancelled each other.

CRAP!

Oh well... better break even than loss but I was so prepared for this one.

You need nerves of steel to trade the news. I was caught long in the initial spike but had time to close this long position and reverse for a sell GBP with result of +34 pips. Phew........

Lesson: Be extra careful when conflicting news are released. I imagine GDP result was released first that caused the spike up, then BOE minutes were released that caused the big reversal.