GBP/USD caught a slight lift on Tuesday, creeping into the 1.3450 region and tilting into a third straight bullish session. United Kingdom (UK) Gross Domestic Product (GDP) growth figures beat expectations, bolstering the Pound Sterling (GBP), while US Dollar (USD) flows hunkered in place as investors brace for the US government's latest funding crisis shutdown.
UK GDP accelerated to 1.4% YoY in Q2, rising above the expected hold at 1.2%. GBP flows tilted bullish afterward, but FX market flows have broadly drawn down ahead of the US government shutdown, which was confirmed after Congress retired early on Tuesday, forcing the US federal government to cross the fiscal year rollover on October 1 without a functioning government budget plan.
Institute of Supply Management (ISM) Purchasing Managers Index (PMI) figures from the US are due on Wednesday, as well as the latest ADP Employment Change data for September. The Chicago Advance PMI contracted sharply, casting fresh doubt on the median market forecast for Wednesday's ISM PMI print, which is expected to tick up to 49.0 from 48.7.
ADP Employment Change is expected to shift slightly lower, falling to 50K from the previous 54K. ADP jobs data has a tenuous-at-best relationship with Nonfarm Payrolls (NFP) data, but investors lacking access to trustworthy government data will have little choice but to tilt further into the ADP figures this week.
The US Bureau of Labor Statistics (BLS) has already announced that they will be canceling or delaying the latest NFP jobs numbers if the US government shuts down. NFP, which was scheduled to release this Friday, has become a large question mark for markets.
Source: Fxstreet
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