UK focus to the am session.
Posen still as doveish as ever overnight.
Senior BoE members willappear before the Tsy Select committee to discuss the May Inflation report at 10am
UK GDP (3rd release) at 9:30)…see our preview below
Trading retain their bearish outlook on GBP…
One sentence in the preview from economics ,sums up the feeling at mom pretty well.
“…However, any revisions in this third release would need to be exceptionally large to alter the broad picture of weak consumer spending and strong government expenditure – a troubling balance given our expectation of a tightening of the fiscal position in the coming quarters…”
“The second release of the Q1 UK GDP data confirmed growth at 0.5% q-o-q, 1.8% y-o-y. However, the expenditure breakdown (published for the first time) showed a marked contrast between extremely weak private domestic demand and strong government expenditure, with net trade making a significant positive contribution over the quarter. Although it is in keeping with the re-balancing theme, a fair part of this positive trade contribution can be attributed to the disruption of exports caused by the poor weather at the end of 2010, as well as a decline in imports of erratic items (aircraft). Revisions to the expenditure breakdown of GDP are a common occurrence between the second and third releases, and can often prove substantial. However, any revisions in this third release would need to be exceptionally large to alter the broad picture of weak consumer spending and strong government expenditure – a troubling balance given our expectation of a tightening of the fiscal position in the coming quarters. Perhaps of greater significance, therefore, will be the figures on disposable incomes and the savings ratio, as these will serve to indicate the extent to which households have had to dip into their savings to prevent an even worse decline in consumption.”
HSBC Global Research