IMF to deliver UK health check, New Zealand Q3 GDP expected to slow

Philip McHugh December 20th 2017 - 2 minute read

  • IMF to deliver UK economic assessment
  • Will CBI report a dip in retail sales?
  • New Zealand GDP could send NZD lower

Pound could weaken on IMF health check

The head of the International Monetary Fund (IMF), Christine Lagarde, is in London this morning and will present the Fund’s annual assessment of the UK economy.

Investors are likely to pay close attention to the IMF’s latest health check today as the Fund gives its assessment on what impact Brexit has had on the UK economy and how it may effect growth going forward.

Lagarde previously warned in the run up to Brexit that there wasn’t ‘anything positive to say about a Brexit vote,’ and that it would prompt a crash in the stock market and house prices.’

It’s unlikely to bode well for the pound should she strike a similarly dovish tone at her speech at the treasury later this morning.

Will CBI data impact the pound?

The Confederation for British Industry (CBI) will publish its monthly distributive trade index later today, something which could help strengthen GBP if it beats expectations as the CBI’s industrial trends balance did on Monday.

Economists currently forecast that the trade index will have slipped from 26 to 20 in December as retail sales slowed this month after showing strong growth in November thanks to the success of black Friday sales.

However, Sterling may still strengthen if retail activity remains surprising robust this month, as it did with the CBI’s industrial trends orders on Monday.

An uptick in sales would also further bolster optimism that the UK economy may have picked up the pace in the last quarter of 2017.

New Zealand Q3 GDP to Slip?

New Zealand will publish its latest growth figures later this evening, and the data is likely to weigh on NZD as economists forecast that the economy will have slowed in the third quarter.

Economists forecast that GDP will have dipped from 0.8% to 0.6% as the temporary factors that helped bolster growth in the June quarter will have abated.

This will most easily be seen in the accommodation and hospitality sectors, which will likely have normalised after receiving a boost from the Lions rugby tour in the second quarter.

The dairy industry is also likely to have hampered growth as modest rises in dairy prices failed to offset a downturn in production.

Upcoming Data

Wednesday, 20th December 2017

11:00               GBP CBI Distributive trades
15:00               USD Existing Home Sales
21:45               NZD Q3 GDP

Written by
Philip McHugh

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