Pound fundamentals-IMF cut to UK GDP growth forecast

The IMF has lowered its GDP growth forecast from 2pc to 1.7pc on “weaker-than-expected activity”
The pound has shrugged off the prediction, rising against the euro and dollar in early trading
FTSE 100 continues to fall with aviation giants easyJet and IAG struggling again
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9:07am
Eurozone PMI reading hits six-month low; ‘recent growth spurt lost momentum’

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tEconomics: #Euro Markit Composite PMI Flash at 55.8 https://tradingeconomics.com/euro-area/composite-pmi …
1:31 PM – 24 Jul 2017
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The Eurzone’s recent “growth spurt lost momentum” but “still remained impressive” in July, according to new data released this morning from IHS Markit.

Eurozone PMI Composite Output Index for July came in at 55.8, a fall from 56.3 in June and a six-month low.

Chris Williamson, chief business economist at IHS Markit, said that the indications are that the region’s recovery has merely hit a speed bump, however:

“The July fall in the PMI indicates that the eurozone’s recent growth spurt lost momentum for a second successive month, but still remained impressive.

“The slowing pace of economic growth signalled by the surveys and the accompanying easing of price pressures adds to the belief that ECB policymakers will be in no rush to taper policy, and will leave all options open until the central bank sees a clearer picture of the sustainability of the upturn.

“It’s too early to know for sure whether the economy has merely hit a speed bump or whether the upturn is already starting to fade. The evidence so far points to the former, with the economy hitting bottlenecks due to the speed of the recent upturn.”

9:00am
Brent crude trading below $48 per barrel as OPEC meets on production cuts
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Oil fell sharply on Friday after reports of an increase in supply
Brent crude is trading at below $48 per barrel as concerns grow that oil cartel OPEC’s production cuts won’t be enough to shift the glut of oil keeping prices low.

The price fell sharply on Friday after a Reuters report revealed that OPEC production will likely increase in July with fears that this could increase as compliance among members begins to ebb.

Michael Hewson, CMC Markets analyst, commented:

“For all recent talk of compliance with production cuts most commentators know that it is Saudi Arabia that is doing all the heavy lifting, and with Libya and Nigeria excluded from the numbers the perception was that the output extension, agreed in May was always a paper tiger.

“With Ecuador breaking ranks last week to increase its production on the grounds it needs the money, today’s meeting in St. Petersburg could open up further splits if bigger OPEC members decide they could do with the extra revenue for higher output.”

8:49am
FTSE 100 ‘hurt by comments from the IMF’; European markets continue sell-off
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Sterling has given a “more measured” response than the FTSE 100 to the IMF cutting the UK’s GDP growth forecast for 2017 to 1.7pc, according to Spreadex analyst Connor Campbell.

He said:

“Of course the FTSE wasn’t best pleased about this news, dropping half a percent to complete the shedding of all of the growth managed in the back half of last week.

“Sterling was more measured in its response to the IMF update, sitting flat (just) above $1.30 against the dollar while pushing 0.2% higher against the euro. However, that still leaves the pound at its worst price since last November against the latter.”

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IMF’s growth forecast cut underscores need to increase productivity says UK

UK government spokesman replying to IMF’s GDP forecast cut 2…
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The euro advanced on the pound on Thursday after ECB president Mario Draghi’s dovish appearance at the central bank’s policy meeting couldn’t dissuade investors that it will soon announce the tapering of its bond purchasing programme.

Although the IMF has upgraded its GDP forecasts for several Eurozone countries, European markets have fallen this morning as last week’s sell-off inspired by the euro’s strength hitting its big exporters continues.

8:30am
Agenda: Pound shrugs off UK GDP growth downgrade from IMF
Good morning and welcome to our live markets coverage.

This morning sterling has brushed off the International Monetary Fund downgrading the UK’s GDP growth forecast for the year from 2pc to 1.7pc due to “weaker-than-expected activity”.

While the US also saw its forecast slashed as fears that president Donald Trump will struggle to implement his economic stimulus plan, the IMF said that the outlook in several Eurozone countries was better than initially expected.

 

Eurozone PMI readings due this morning are likely to dictate some movement later on.

The FTSE 100 has picked up from where it left off at the end of last week, falling another 0.36pc in early trading.

Reckitt Benckiser has kicked off a packed corporate calendar this week with a mixed first-half performance. Although the consumer goods giant reported a rise in profit, like-for-like growth fell 2pc as it deals with the fallout from the cyber attack it faced last month.

Interim result: Reckitt Benckiser Group, Dialight, Ascential

Full result: Tungsten Corporation

AGM: Solo Oil, Specialist Investment Properties

Trading statement: Cranswick

Economics: Existing home sales (US), flash PMIs (EU)

 

-telegraph

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