The big surprise thus far in European trading on Tuesday morning has been the release of better than expected Q3 GDP statistics from the UK. With expectations set modestly at 0.4% for the quarter (i.e. 1.6% annualized), it was a rather low bar to exceed, and the actual figure of 0.8% has sent sterling rocketing.

However not all is so rosy for the rainy isles as the yield on 10-yr gilts moved up about 20 basis points.

As I commented earlier, the number is actually rather awkward for the bulls who have become accustomed to the idea that the B of E will always be there to buy UK Treasury issue and help to "support" financial assets. Unlike the Goldilocks story, the required number should neither be too hot nor too cold; for QE addicts - on both sides of the Atlantic at present - the numbers for GDP need to remain distinctly cold.

The hourly chart for the S&P 500 futures has shown some erosion since the UK statistic was released, and perhaps reminded traders that the extent of further asset purchases by the monetary authorities may not be sufficiently generous for the Herculean task of propping up both bonds and equities.

Reviewing the chart, it can be seen that the 1165 area on the S&P 500 futures remains quite a critical area of support.



EUR/JPY met the target recommended in yesterday’s commentary during Asian trading on Tuesday morning.



EUR/USD has broken twice below significant uptrend line and may need to re-test the $1.38 level as it has been unable to retain a footing above $1.40.



Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market.