Cable Soars After Strong UK GDP, Boosting Rate Hike Odds

Jon Alternative Media, Blogosphere, Economy

It all started at 9:30am local time, when the UK reported a stronger than expected Q3 GDP print of 0.4% Q/Q, above the Exp. 0.3%, and 1.5% Y/Y, also above the Exp. 1.4%. Heading into the report there was much anticipation, due to chatter that a miss would drastically diminish the chance for a 2017 rate hike from the BOE. And while the initial response to the beat was rather muted, cable started gathering momentum after the report, with cable rising as high as 1.326, after nearly sliding below 1.31 earlier in the session.
And while the strong data will likely reassure those at the BoE in favour of hiking, it was not strong enough to convince those who are still on the fence. Still, given the split, most sellside desks believe that a hike is now more or less guaranteed, especially with Brexit noise dying down for the time being.

This post was published at Zero Hedge on Oct 25, 2017.