GBP: Expect a solid 1.0% gain in UK’s manufacturing production - BNPP

Research Team at BNP Paribas, expects today’s September UK production data to show a solid 1.0% gain in manufacturing production, consistent with the strong PMI readings and solid Q3 GDP growth reported.

Key Quotes

“UK data continues to confirm the economy has avoided worst-case scenarios, partly thanks to Sterling depreciation. Cable traded above 1.25 last week after a UK court ruled in favour of a parliamentary consent requirement for invoking Article 50 and our position indicator suggests the GBP short position has now been reduced to its smallest level since the vote.

While a USD post-election recovery might cap GBPUSD for now, we think the pair has scope to recover substantially heading into next year, and we remain positioned accordingly via a six-month GBPUSD call spread recommendation.”