GLOBAL MORNING BRIEFING: UK and US Q3 GDPs

Markets will be watching to see whether UK and US GDP remain in line with earlier estimates, as well as whether factory gate inflation in European economies could be beginning to slow.

UK GDP Q3 Final Estimate (0700 GMT)

Analysts project UK GDP growth for Q3 to remain in line with previous estimates of 1.3% q/q and 6.6% y/y growth. Quarterly growth is predicted to have slowed from Q2’s jump to 5.5%, however remains significantly above the long-run average of 0.3% q/q growth.

The main contributors to growth over Q3 have been services which grew by 1.6% in Q3 on the back of hospitality, arts and recreation and health as covid-19 restrictions were eased, whilst retail and wholesale trade fell by 2.5%. Construction and manufacturing declines by 1.5% q/q and 0.3% q/q respectively.

Real quarterly GDP remains 2.1% below the pre-pandemic level of Q4 2019.

France, Spain and Sweden’s November PPI readings (0745 / 0800 / 0830GMT)

French, Spanish and Swedish factory gate inflation data is due this morning, where particular focus will be on Spain following last month’s record high where PPI soared 8 points to 31.9% y/y in October as energy costs jumped 87.3% y/y and intermediate goods rose 19%y/y.

France saw PPI grow 2.9% m/m and 14.9% y/y whilst Sweden had a mild monthly growth of 0.1% m/m and an increase on the annual reading of 16.8% y/y.

With limited survey data available, analysts predict Spanish PPI to increase more moderately to 32.5% y/y, whilst French and Swedish PPI growth are expected to cool marginally.

US GDP Growth at 2.1% (1330 GMT)

Final US GDP growth is forecasted to remain in line with the estimate at 2.1% q/q for Q3 2021.

This is a substantial deceleration from Q3’s reading of 6.7% q/q, largely due to a slowdown in personal consumption expenditure on both goods, in particular automotive, and hospitality services.

Q3 saw covid-19 cases increase alongside a reduction in government assistance payments, whilst annual inflation hovered around the 5.4% y/y mark, further tightening disposable income for personal consumption compared to the previous quarter.

There are no key policy maker speeches this week in the lead up to Xmas.

Date	GMT/Local	Impact	Flag	Country	Event
22/12/2021	0700/0700	*		UK	Quarterly current account balance
22/12/2021	0700/0700	***		UK	GDP Second Estimate
22/12/2021	0700/1500	**		CN	MNI China Liquidity Suvey
22/12/2021	0745/0845	**		FR	PPI
22/12/2021	0800/0900	**		ES	PPI
22/12/2021	0830/0930	**		SE	PPI
22/12/2021	0830/0930	**		SE	Retail Sales
22/12/2021	1200/0700	**		US	MBA weekly applications index
22/12/2021	1330/0830	***		US	GDP (3rd)
22/12/2021	1500/1000	***		US	NAR existing home sales
22/12/2021	1530/1030	**		US	DOE weekly crude oil stocks
22/12/2021	1800/1300	**		US	US Treasury Auction Result for TIPS 5 Year Note