When are the UK data releases and how could they affect GBP/USD?

The UK Economic Data Overview

The UK docket has the first-ever monthly GDP release today, alongside the trade balance and industrial production, all of which will be published later this session at 0830 GMT.

The United Kingdom GDP is expected to arrive at 0.3% in May. Meanwhile, the manufacturing production, which makes up around 80% of total industrial production, is expected to show m/m growth of 0.9% in May, up from a contraction of 1.4% recorded in April. Meanwhile, the total industrial production is expected to come in at 0.5% m/m in May as compared to the previous reading of -0.8%.

On an annualized basis, the industrial production for May is expected to have risen to 1.9% versus 1.8% previous, while the manufacturing output is also anticipated to have accelerated to 1.9% in the reported month versus 1.4% last.

Separately, the UK goods trade balance will be reported at the same time and is expected to show a deficit of £12.00 billion in May vs. £-14.03 deficit reported last.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined around 20-pips in deviations up to + or -2, although in some cases, if notable enough, a deviation can fuel movements in excess of 60-70 pips.

How could affect GBP/USD?

Today's macro releases could be overshadowed by looming uncertainty over the UK government with regard to the Brexit issue. However, a positive surprise in the UK data could offer the much-needed respite to the GBP bulls, as it could boost the chances of an August Bank of England (BOE) rate lift-off.

Haresh Menghani, FXStreet’s Analyst notes: A convincing break below the 1.3200-1.3180 region will reinforce the negative outlook and accelerate the fall back towards the 1.3110-1.3100 support area. A follow-through selling could drag the pair back towards YTD lows support near mid-1.3000s en-route the descending trend-channel support, currently near the key 1.30 psychological mark. On the flip side, the 1.3300 handle now seems to act as an immediate strong hurdle, above which the pair is likely to make a fresh attempt towards clearing the 1.3345-50 confluence region.”

Key Notes

Market themes of the Day: UK manufacturing and the first monthly GDP headline

GBP/USD Review: Brexit concerns continue to edge higher ahead of UK's first monthly GDP

UK: Key economic events today - Nomura

About the UK Economic Data

The Gross Domestic Product released by the Office for National Statistics (ONS) is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity. Generally speaking, a rising trend has a positive effect on the GBP, while a falling trend is seen as negative (or bearish).

The Manufacturing Production released by the Office for National Statistics (ONS) measures the manufacturing output. Manufacturing Production is significant as a short-term indicator of the strength of UK manufacturing activity that dominates a large part of total GDP. A high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or bearish).

The trade balance released by the Office for National Statistics (ONS) is a balance between exports and imports of goods. A positive value shows a trade surplus, while a negative value shows a trade deficit. It is an event that generates some volatility for the GBP.