Today’s Spotlight Market
3rd quarter GDP for the United Kingdom came in at a positive growth rate of 0.5%, which is down from 0.7% the previous quarter. The 0.5% was higher than the forecasted range of negative 0.1% to positive 0.3%.? However, the positive growth rate came only from the service sector, which makes up 75% of the UK economy. The service sector grew by 0.8%, while construction, agriculture, and industrial production all declined.
Fundamentals
An additional positive sign for the UK was also announced this morning, as Nissan confirmed that they will produce the next model of the Qashqai SUV at their plant in Sunderland which will secure the 7000 jobs at the plant. In addition, earlier this week, UK Transport Secretary Chris Grayling announced plans to add a third runway to London?s Heathrow airport. This expansion is anticipated to add up to 61 billion Pounds to the economy as well as a potential 77,000 jobs. Finally, it appears the stalemate has been broken in the European Union over the CETA trade agreement between the European Union and Canada. This may provide hope that although negations between the EU and the UK may be contentious at times, a deal will eventually be reached.
Technical Notes? -? View Today’s Chart
Turning to the 3-month continuation chart, the British Pound continues to remain in solidly bearish territory.? The 20-day simple moving average (SMA) crossed below the 50-day SMA in early October, and the divergence between the two moving averages continues to increase. Since the beginning of September, the Pound has shown the bearish trend of lower highs and lower lows. 14-day relative strength index is at 30.96, just above the oversold level.
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