When are the UK data releases and how could they affect GBP/USD?

The UK Economic Data Overview

The UK docket has the monthly and quarterly GDP releases today for the second quarter, alongside the trade balance and industrial production, all of which will be published later this session at 0830 GMT.

The United Kingdom GDP is expected to arrive at 0.3% m/m in June while the first readout of the Q2 GDP is seen at 0.4% q/q and 1.3% y/y.

Meanwhile, the manufacturing production, which makes up around 80% of total industrial production, is expected to show m/m growth of 0.3% in June, down from an expansion of 0.4% recorded in May. The total industrial production is expected to come in at 0.4% m/m in June as compared to the previous reading of -0.4%.

On an annualized basis, the industrial production for June is expected to have eased to 0.7% versus 0.8% previous, while the manufacturing output is also anticipated to have dropped to 1.0% in the reported month versus 1.1% last.

Separately, the UK goods trade balance will be reported at the same time and is expected to show a deficit of £12.05 billion in June vs. £12.36 deficit reported last.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined around 20-pips in deviations up to + or -2, although in some cases, if notable enough, a deviation can fuel movements in excess of 60-70 pips.

How could affect GBP/USD?

Today's macro releases could be overshadowed by escalating trade tensions that have weighed down heavily on the Lira, Yuan and Ruble over the last trading days. However, upbeat UK GDP figures could offer the much-needed respite the GBP bulls, but it could be a temporary relief, as the bears could return on upbeat US July CPI data.  

Haresh Menghani, FXStreet’s Analyst notes: “Looking at the technical picture, the pair on Thursday confirmed a fresh bearish breakdown below a short-term descending trend-channel and hence, seems more likely to extend the downward trajectory towards testing August 2017 lows, around the 1.2775-70 region. A follow-through selling has the potential to continue dragging the pair further towards testing sub-1.2700 level in the near-term. On the flip side, any recovery attempts might now confront fresh supply near the trend-channel support break-point, now turned resistance, around the 1.2840-50 region.”

Key Notes

Market themes of the Day: UK Q2 GDP set to rise double the pace of the first quarter

UK: Trade and GDP data in the limelight today – Nomura

UK: Focus on Q2 GDP - TDS

About the UK Economic Data

The Gross Domestic Product released by the Office for National Statistics (ONS) is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity. Generally speaking, a rising trend has a positive effect on the GBP, while a falling trend is seen as negative (or bearish).

The Manufacturing Production released by the Office for National Statistics (ONS) measures the manufacturing output. Manufacturing Production is significant as a short-term indicator of the strength of UK manufacturing activity that dominates a large part of total GDP. A high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or bearish).

The trade balance released by the Office for National Statistics (ONS) is a balance between exports and imports of goods. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the GBP.