British economy seems on track; sterling eyes gains but global cues not conducive

The better-than-expected May industrial production release earlier this week, suggested that the UK was on track for acceleration in GDP growth in Q2. While in contrast the 0.8% drop in April construction output points to a tepid start to the quarter, with survey-based indicators for the sector such as the PMI and BoE Agents' scores remaining resilient.

We look at the near term outlook for construction activity remains positive. So for May, some acceleration expected in activity looks on the cards.

We forecast a 0.7% rise in output which would still put the sector on track to provide a positive contribution to GDP growth in Q2.

The pound was higher, with GBP/USD up 0.16% to 1.5385. Pound against major currency baskets trades high after BoE's unchanged rate policy schemes and asset purchases. GBP/JPY began showing recovery of last months' losses, currently trading 188.551.

We recommend on speculation basis buying either ITM binary or even ATM calls for targets 189.154. When we mentioned ITM binary call then the trade idea has to be buy at dips for today.