Asking yourselves how can UK industrial production move the Sterling? Britain’s manufacturing production and trade balance data for November are due at 9:30 GMT on Wednesday.
UK Industrial Production Estimates
About 80% of the UK’s total industrial production is covered by manufacturing, which is expected to grow 0.3% on monthly basis in November, compared with a humble 0.1% in October. Also, the total industrial production is expected to show a 0.3% expansion m/m in November against a 0.0% reading in the previous month.
However, on an annualized basis, the UK industrial production for November may potentially ease to 1.8% against a previous 3.6%. By comparison, analysts expect the manufacturing production figures to come in at 2.8% in the reported month against a 3.9% seen in October.
Moving forward, the prognostication revolving around the UK’s trade balance hovers above GBP – 1.70 billion in November, compared with GBP – 10.78 billion last.
UK Industrial Production Actuals
Finally, the Office for National Statistics has just published the long-awaited manufacturing production report, which beat all expectations.
Manufacturing output came in at 0.4% m/m in November against 0.3% (revised higher from 0.1%) in the previous month, while the total industrial output gained 0.4%, compared to a 0.2% upward revision from 0.0% in October.
On an annualised basis, the UK’s manufacturing production figures arrived at 3.5% in the reported month, beating all estimates. Overall, the country’s industrial output expanded 2.5% in November, bettering expectations of 1.8% and against the previous 4.3% print.
Sterling Moved by Industrial Production Data
Ahead of the actual release, the market seems to have already priced in these figures, as GBPUSD moves higher. The pair seems to find consolidation just below recent highs at 1.35176, as of writing ranging between 1.35139-41. There is potential for a cable tiny slip, as it has just broken above 3-year lows, which moves the Sterling up to September’s high against the dollar. At the same time, this move creates plenty of space for a double Fibonacci retracement. Intraday dips should find support at 1.3519 (S1).
Despite the upbeat data release, the Sterling moved lower, currently trading below S1, at 1.34966 and below.
Crude Hits Highs
Crude hits highs on Wednesday! With crude oil inventories on tap, oil prices extended gains, with US crude futures reaching a 3-year high on a tight supply balance due to OPEC’s production cuts and a steeper fall in US crude inventories.
According to the American Petroleum Institute, crude inventories dropped by 11.2 million barrels in the week ending January 5, hitting 416.6 million. This figure exceeded analysts’ expectations, which were revolving around a decrease of 3.9 million barrels.
Consequently, WTI crude added a few $, starting the day at $ 63.44, while Brent crude traded at $ 69.17.