UK Economy Grows in May But Underlying Risks Continue

GBP Talking Points:

英镑谈话要点：

• UK GDP grew by 0.3% in May, above expectations of just 0.1%, and April GDP is revised higher potentially avoiding contraction in Q2

  5月英国国内生产总值增长0.3％，高于预期只有0.1％，而4月份国内生产总值修正得更高，有可能避免第二季度收缩

• Despite a small push for Sterling, both EURGBP and GBPUSD are nearing levels last seen in January 2019 when GBP was at year lows

  尽管对英镑的推动不大，但欧元兑英镑和英镑兑美元均接近尾声2019年1月，英镑处于年内低点

• Manufacturing and industrial production manage to grow slightly in May but global trade wars and slowing growth continue to weigh on the industry

  制造业和工业生产在5月份略有增长，但全球贸易战和增长放缓仍在继续关于行业

Sterling faced some sell off pressure in the opening of the European session as investors awaited key manufacturing and growth figures to be released. GBPUSD is nearing year-lows as continued political uncertainty keeps sterling in a downward spiral. The pair is currently trading around 1.2455, close to its 1.2422 dip experience in January 2019, its lowest level since the aftermath of the Brexit referendum. The pair then managed to correct higher as monthly GDP figures showed that the UK economy managed to correct previous losses and grew 0.3% in May, above expectations.

英镑在欧洲时段开盘时面临一些抛售压力，因投资者等待关键制造业和增长数据即将公布。英镑兑美元接近年内低点，因为持续的政治不确定性使得英镑处于下行螺旋上升。该货币对目前交投于1.2455附近，接近其2019年1月的1.2422下跌经验，这是自英国脱欧公投后的最低水平。然后，由于月度GDP数据显示英国经济在5月份修正了之前的损失并且在5月份增长了0.3％，高于预期，他们设法纠正了更高的水平。

EURGBP followed suit with an initial push higher for the pair which was later corrected on the release of the data. The pair is currently trading around 0.8999, its highest level since January 11.

EURGBP紧随其后对该货币对推高，后来在数据发布时进行了纠正。该货币对目前交易于0.8999附近，为1月11日以来的最高水平。

PRICE CHART: GBPUSD DAILY TIME FRAME (OCT 2018 – JULY 2019)

价格表：GBPUSD每日时间框架（2018年8月 - 2019年7月）

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UK GDP grew 0.3% in May, above expectations of just a 0.1% growth, and the April figure has been revised upwards from an initial contraction of 0.3% to a growth of 0.4%, which was partly due to the unwinding of stockpiling on the back of the Brexit deadline being pushed back. The upward revision could mean that the economy could have avoided a contraction in the second quarter of the year, which was initially feared, with growth for the first half of the year running below potential, and fears of a possible recession increasing. Inflation dropped slightly in May, but it remains close to its target of 2%, easing the pressure to increase rates and falling closer in line with the dovish tone from most of the other Central Banks. Key focus will be on next weeks CPI figures as a further drop in inflation could increase the likelihood of a rate cut in the next FOMC meeting.

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Manufacturing and industrial production figures for the month of May continue to show the struggles manufacturers are facing on the back of slowing growth and trade wars. YoY manufacturing production in May showed no growth has been experienced from this time last year as expectations were for a 1% growth. Monthly manufacturing showed that the industry managed to pick up in the last month, with a change of 1.4% from the previous month, when it experienced a drop of 4.2%, but the figure was still below expectations of 2.2%. Industrial production showed slight growth both in the monthly and yearly figure, but they were both still below expectations. This data comes after manufacturing PMIs for the month of June came in at 43.1, much lower than expectations of 49.3, as client confidence is dampened by heightened economic and political uncertainty.

5月制造业和工业生产数据继续显示制造商在经济增长放缓和贸易战后面临的困境。 5月制造业产量同比增长显示去年同期没有增长，因为预期增长1％。月度制造业显示，该行业在上个月成功回升，较上个月变化1.4％，当时经历了4.2％的下降，但这一数字仍低于预期的2.2％。工业生产在月度和年度数据上均略有增长，但均低于预期。 6月份制造业采购经理人指数为43.1，远低于预期的49.3，因为经济和政治不确定性加剧抑制了客户信心。

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Economic landscapes in a “sea of change”

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Bank of England Governor Mark Carney warned investors last week that global economies face a shock as global trade tensions have shifted market expectations towards interest rate cuts by most central banks. His comments led to an increase in bets that the BoE will cut rates by the end of the year as markets price in the need for more monetary stimulus.

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Industry experts have warned that the British economy is facing its slowest growth since the 2008 recession, falling behind other G7 countries. The uncertainty surrounding the Brexit outcome continues to drag on investment as the deadline was pushed back from March to October. The extension of the exit date has meant that companies and households have been on “preparation” mode for almost a year now, pushing back consumption and spending until the uncertainty dissipates, which is damaging the economy.

行业专家警告说，英国经济正面临自2008年经济衰退以来的最慢增长，落后于其他G7国家。英国退欧结果的不确定性继续拖累投资，因为截止日期从3月推迟至10月。扩展退出日期已经意味着公司和家庭近一年来一直处于“准备”模式，推迟消费和消费直到不确定性消失，这正在损害经济。

Not only is lacklustre data dragging down on sterling, as the race to become the next tory leader and prime minister only adds to the concern. The current political landscape seems to be more about who is the toughest candidate to stand up to the European Union to achieve a new deal or follow through with a no-deal harsh Brexit, which markets still consider to be the worst possible outcome. Rather than working towards building up consumers‘ confidence in the future of the British economy by finding possible ways to dissipate the fallout from the UK’s divorce from the European Union, both candidates seem to be tied up in a game of trying to prove who is the biggest “macho” out of the two, which is not going to help in reviving investment.

不仅低迷的数据拖累英镑，因为成为下一个保守党领袖和总理的竞争只会增加担忧。目前的政治格局似乎更多的是关于谁是最难以应对欧盟以达成新协议或坚持无交易严厉的英国退欧的候选人，市场仍然认为这是最糟糕的结果。通过寻找消除英国与欧盟离婚后果的可能途径，而不是努力建立消费者对英国经济未来的信心，两位候选人似乎都陷入了试图证明谁是谁的游戏中。两者中最大的“男子气概”，这对恢复投资没有帮助。