Morning Note: GDP in the UK, Spain and Canada to Shake Markets Today

Today's economic calendar is packed with important events that could shape global market expectations. Quarterly GDP in key economies, consumer confidence data in the US and technical movements in the foreign exchange market promise an intense day for investors and analysts. Below, we highlight the main points of attention:

GDP in the UK: Slowdown on the way?

The UK releases its third quarter (Q3) GDP data today. Previous readings have been slightly positive but very close to zero, with the latest reading showing 0.5%. For Q3, the market expects just 0.1%, reflecting a certain pessimism regarding the British economy. The Bank of England (BOE) recently kept interest rates unchanged at 4.75%, but a lower-than-expected GDP reading could force it to consider future cuts to stimulate the economy. While this will bring relief in the short term, it could result in higher inflation in the medium term.

Spanish GDP: numbers point to growth in 2024

In Spain, the third quarter (Q3) of GDP will also be released, but with a more optimistic outlook. Readings have been more robust, around 0.8%. Spanish inflation has been stable, around 2%, in line with the European Central Bank’s (ECB) medium-term objective. Unlike the UK, Spain has no control over its monetary policy, relying on ECB decisions that affect the entire eurozone. This limits the tools for direct adjustment to its economy, making GDP data even more relevant for assessing growth.

Canadian GDP: Slowdown and new challenges with US partner

Canada will present monthly GDP data, which reflects a slowing economy. Recent readings have been positive but well below 2022 and 2023 levels. With inflation stable around 2%, the Bank of Canada (BOC) has adopted a more dovish monetary policy, cutting interest rates in the last five consecutive meetings, including aggressive cuts of 0.5% at the previous two. However, future challenges may arise with the return of Donald Trump to the US presidency, as he has already proposed a 25% tariff on Canadian goods, which could further pressure Canadian GDP and the CAD

Consumer Confidence in the US

In the United States, the Conference Board (CB) Consumer Confidence Index will be released. This indicator is vital to understanding economic expectations, as household consumption accounts for two-thirds of overall GDP. The latest readings were around 104, indicating moderate optimism regarding the economic future. Maintaining this confidence is essential for the sustained growth of the US economy.

EURUSD breaking key support level in the daily chart

In the forex market, EURUSD is showing signs of breaking the support area at 1.0450 on the daily chart. The downtrend remains intact, with the next important support located at 1.0250. There is speculation that Donald Trump's return to the US presidency in 2025 could further strengthen the dollar, potentially pushing EURUSD towards parity at 1.0000. The continuation of this movement will depend on the impact of protectionist policies and the global economic response.

With so much critical data and technical movements, the day promises market volatility. The focus now will be on analysing the numbers and the reactions of monetary policies on a global scale.

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