Research Team at BBH note that the UK's industrial output rose 2.1% in November, and the October decline was shaved to -1.1% from -1.3%.
Key Quotes
“This is the largest increase in seven months. The year-over-year pace stands at 2.0%. The Bloomberg median forecast was for a 0.7% pace. Manufacturing drove the increase. It rose 1.3% on the month and 1.2% year-over-year.”
“On the other hand, the UK trade balance deteriorated more than expected. The overall trade balance (goods and services) rose to GBP4.167 bln, which is more than 10% larger than anticipated. The October shortfall was revised to GBP1.547 bln from GBP1.971 bln. The deterioration can be accounted for by merchandise trade. That trade deficit widened to GBP12.16 bln from a revised GBP9.885 bln (from GBP9.711 bln). Total imports jumped 8.4%. Imports of transport equipment (e.g., ships and aircraft) rose and the increase (GBP1.4 bln) accounts for around half of the trade deterioration. Exports rose 2.8%.”
“Sterling has traded on both sides of yesterday's range. As we noted, the break of $1.22 earlier this week was the first time in more than two months and is important from a technical point of view. It now is acting as resistance and sterling was sold as this was approached in Asia. Sterling briefly dipped below $1.21 for the first time since October 25. A near-term low may be in place, and another test on $1.22 cannot be ruled out now.”
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