At 10:30 the markets got acquainted with the latest ONS report on the change in production volume for the British manufacturing industry. As it turned out, all the components of the report turned out to be much worse than expected, which lead to a depreciation of the pound sterling.

According to the Office for National Statistics report, despite forecasts for an increase of 0.4%, in February 2018 total industrial production increased m/m by only 0.1%. In year-on-year terms, the growth was at the level of 2.2%, which is also a result of worse forecasts assuming an increase of 2.9%.

The data on manufacturing industry were equally weak. In this case, a month-on-month decrease was recorded by 0.2% and in year-on-year terms an increase of 2.5%. Meanwhile, analysts expected growth by 0.2% MoM and 3.3% YoY, respectively.

The only good data on the trade balance, which increased in February to -10.20 billion. from 12.23 billion. previously.

Market reaction

Weak data on industrial output caused that at the first moment after the publication of the ONS report we observed quite strong depreciation of the pound sterling. If these declines are continued, on the GBPUSD currency pair, we could expect to even re-test the 1.4183 level.

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