UK FISCAL: Error in fiscal data benefits government; but another ONS data issue

Industrial Production marginally stronger than expectations (1.3% M/M vs 1.0% cons), with the print being bolstered by a material June upward revision to -0.1% (from -1.9%). Remember that the weak June print was a contributor to the 0.2pp Q2 GDP downward revision to -0.3% Q/Q.

• Excluding construction and energy, (manufacturing) production does now indeed stand noticeably above cycle lows (see chart below). However, for the total IP print, the picture looks less favourable: "The less volatile three-month on three-month comparison showed that production was 0.1% lower in the period from May 2025 to July 2025 than in the previous three months", Destatis comments.
• On drivers: "Production in industry excluding energy and construction was up 2.2% from June 2025 after seasonal and calendar adjustment. Within industry, increases were reported in all three major groups. The production of capital goods rose by 3.0%, consumer goods production increased by 2.1% and intermediate goods production was up 0.8%. Production in construction rose by 0.3%."
• One caveat is that recent factory orders data indicated that the main part of any German industry momentum comes from the external sector, leaving the domestic sector weak.

• RES 4: 177.08 2.000 proj of the Feb 28 - Mar 18 - Apr 7 price swing 
• RES 3: 175.43 High Jul 11 ‘24 and a key medium-term resistance
• RES 2: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
• RES 1: 173.97 High Jul 28 and the bull trigger 
• PRICE: 173.47 @ 07:16 BST Sep 8
• SUP 1: 171.05 50-day EMA
• SUP 2: 169.73/45 Low Jul 31 / 23.6% of the Feb 28 - Jul 28 bull leg
• SUP 3: 168.46 Low Jul 1  
• SUP 4: 167.46 Low Jun 23   

The trend needle in EURJPY continues to point north and sights are on key resistance and the bull trigger at 173.97, the Jul 28 high. Clearance of this level would confirm a continuation of the bull cycle. Note that moving average studies are in a bull-mode position too, highlighting a primary uptrend. A break of 173.97 would open 174.86, a Fibonacci projection. Key support to watch lies at the 50-day EMA at 171.05.

• RES 4: 120.74 High Aug 5 and the bull trigger 
• RES 3: 120.61 High Aug 14 
• RES 2: 120.20 High Aug 15  
• RES 1: 120.25 High Sep 5
• PRICE: 120.07 @ Close Sep 5
• SUP 1: 119.06/118.36 Low Sep 4 / 3         
• SUP 2: 118.00 Round number support
• SUP 3: 117.70 2.236 proj of the Aug 5 - 12 - 14 price swing  
• SUP 4: 117.36 2.500 proj of the Aug 5 - 12 - 14 price swing 

The primary trend condition in BTP futures is unchanged and the direction remains up. The strong rally from last week’s low highlights a bullish development and signals the end of the recent corrective pullback. Key resistance and the bull trigger is 120.74, the Aug 5 high. A break of this hurdle would confirm a resumption of the uptrend. Key support has been defined at 118.36, the Sep 3 low.