UK GDP Slows More Than Initially Estimated

Possibility of strategic oil reserves release; UK GDP revised lower; UK current account deficit narrows; French GDP revised lower; solid Italian auction. Market turns to durable goods orders and oil inventories. The latest status on those Premium trades is found below.

The greenback is mixed in the ongoing session. It is weaker against EUR and CHF, unchanged against commodity dollars and stronger against JPY. European equities are slightly in the red, losing about 0.15%. EUR is the strongest while AUD lags.

Reuters reports that France, UK and the US are discussing the possibility of releasing strategic oil reserves to fight high fuel prices which could choke economic growth. The release could come in matter of weeks after WTI reached $110 and brent $127.50 in recent days, mainly due to Iran sanctions and other geopolitical tensions.

Slowing UK economy was confirmed today when the final Q4 GDP was revised lower to -0.3% from -0.2% q/q and to 0.5% from 0.7% y/y. A downward revision of services output, especially from the financial and the insurance business, to -0.1% from 0% is blamed for the fall. Disposable income declined 1.2%, yet surprisingly, the household consumption rose 0.4% which is the first increase in 6 quarters suggesting stable confidence. UK current account deficit narrowed in Q4 to GBP -8.45 bln from GBP 10.51 bln in line with expectations.

In other news: the final print of French Q4 GDP showed a revision lower to 1.3% from the initial estimate of 1.4% on annual basis and German preliminary CPI is due later today as the results are still being collected.

Italy reached a full take up as it sold EUR 8.5 bln worth of 6 month T bill. The average yield declined to 1.119% from 1.202% and cover improved to 1.5 from 1.36.

The US session will bring durable goods orders at 8:30 am that are expected to increase by 3% in February from previous -3.7% (core orders to rise 1.6% from -3%).

Crude oil inventories are due at 10:30 am and are seen higher at 2.8M barrels from previous -1.2M.

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