New Zealand's trade deficit widens [Video]

Today's Highlights

• Key UK Q3 GDP release

• New Zealand's trade deficit widens ​​

• US Dollar steadies

FX Market Overview

The key release this morning will be UK Q3 Gross Domestic Product (GDP). Expectations are for 2.1% growth in Q3 year-on-year. Recent UK data has been broadly positive, including an upward revision of Q2 UK GDP. So this morning will provide the first full growth indication for the UK following the EU Referendum and should help us to understand the state of the UK economy leading into the exit negotiations.

Stop Press: GDP figures just announced slow growth of 2.3% year-on-year and 0.5% quarter-on-quarter. The good news is that the annual figure has beaten expectations and as I write, the Pound has strengthened, although the quarter-on-quarter figure is a slight contraction from Q2. The UK Chancellor, Philip Hammond, has been swift to comment that the "GDP data shows that the economy is resilient", the "fundamentals of the UK economy are strong", the UK is "well placed to deal with the challenges" and that the "UK enters EU negotiations from a position of strength".

Overnight releases saw New Zealand's trade deficit widen in September to NZD -1436m versus an expectation of NZD -1125m. Australia's Import Prices Index dropped -1.0% QoQ in Q3, versus expectations of -0.8% QoQ.

The Euro remains uncertain as markets are waiting for clues on what the European Central Bank will do after the current Quantitative Easing (QE) programme ends in March next year. European Central Bank (ECB) governing council member, Ardo Hansson, said, "there are a few more months of announced purchases to go, but we also see that the transmission of these different measures into, let's say to the level interest rates or other intermediate variables has been quite powerful." And, "at some point of time we have to say what comes after March, one possibility is to do that in December."

The US Dollar has been under pressure this week, but steadied yesterday following stronger US Treasury Yields. This afternoon, the US will release durable goods orders, jobless claims and pending home sales data, the results of which will be factored into US interest rate expectations.