The UK was under scrutiny again as the Manufacturing and Industrial Production readings were released. June’s Industrial Production figure rose slightly with an improved reading of 0.1% m/m and up to 1.6% y/y, showing improvements in production. However, the manufacturing figure fell lower than expected, registering at -0.3% m/m. The y/y figure fell short of market consensus, only rising by 0.9% as opposed to the 1.4% reading expected. The annual growth figure missed forecasts as May’s original reading of -0.5% was revised further down to -0.6%.
The Pound continued its downward trend yesterday and came under further pressure after lunch, as the National Economic Social Research released their estimate of GDP for the three months to July. The post-Brexit estimate showed that GDP is slowing from 0.6% down to 0.3% as this gauge suggests that output for July is down after the UK voted out in the EU Referendum. The chances of the UK falling into a recession could now be seen in the third or last quarter of this year.
Today is another light day on the docket, with further insight into the labour market shown in the form of the JOLTS Job Openings. With the NFP showing good job gains today it is expected to remain constant with the last reading of around 5.50m. Shortly after, the US Oil Inventories will hit the wires where the number of barrels held by firms is due to fall to -1.3m. If this occurs, it would be a positive indication that demand is increasing.
Lastly from New Zealand, tonight the Reserve Bank of New Zealand are expected to cut their interest rate from 2.25%, down to 2%. After the rate is released it will be followed up with the RBNZ Monetary Policy Statement, which could cause volatility for the Kiwi Dollar later this evening.