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Another week, another opportunity at trading the news!

Tomorrow at 8:30 am GMT the U.K.’s Office for National Statistics (ONS) will publish its GDP numbers for Q3 2016.

Let’s explore the three questions you need to answer before you trade the event:

What the heck is a preliminary GDP?!

The gross domestic product (GDP) is the measure of economic activity in a country. Traders pay close attention to a country’s GDP because it acts as the report card of an economy.

The U.K. has three GDP releases for a particular quarter: its preliminary GDP, followed by the revised GDP than the final GDP.

The preliminary GDP, which is also called the initial GDP estimate, tends to have the strongest impact on price action because it offers the very first glimpse into the U.K. economy’s performance for the period.

How did the previous release turn out?

The U.K. economy grew by 0.7% (revised from 0.6%) in the three months to June 2016, higher than the 0.4% uptick analysts had estimated and marked the 14th consecutive month of expansion.

Annual figures were also promising with its 2.1% growth (revised from 2.2%) following a 2.0% annualized expansion in Q1.

As in the first quarter, it was consumer spending that drove growth higher. Industrial production also logged its biggest gain since 1999 even as the service sector slowed from 0.6% to 0.5% during the quarter.

The pound shot up at a better-than-expected release, but the rally soon fizzled out as investors realized that the report only covers activity BEFORE the Brexit vote. It also didn’t help that traders were jittery ahead of the FOMC statement and wanted to take profits before the tier 1 event.

U.K.'s Q2 GDP Release
U.K.’s Q2 GDP Release

The move was somewhat similar to the April release where the pound was contained in a tight range during the Asian session, saw a bit of pre-report positioning, and post-release profit-taking ahead of the FOMC statement.

U.K.'s Q1 GDP Release
U.K.’s Q1 GDP Release

Tips and Tricks: How do I trade the report?

Watch out for extra volatility.
Not only is tomorrow’s release the first insight for Q3 2016 growth, but it will also be the GDP report covering the first months after the Brexit vote.

Also, unlike in the last two GDP releases, there won’t be other major reports scheduled throughout the day. Sure Uncle Sam will print its core durable goods orders and the weekly initial jobless claims data, but they’re unlikely to stop any big intraday trend from the GDP event.

Know what market players are expecting.
Leading indicators point to the Brexit vote not having much impact on the U.K.’s economic activity. In fact, the Bank of England (BOE) recently revised its Q3 2016 growth forecasts higher from 0.1% to 0.2% – 0.3% even as the members warned that it would still represent a “material slowing” in growth.

Right now analysts estimate the headline GDP to clock in at 0.3%, down from Q2’s 0.7% growth, while the annualized figure is expected to remain at 2.1%.

However, word around the hood is that a weak pound and limited inflation have boosted consumer spending, the biggest growth driver in the last two quarters, more than many are estimating.

If growth surprises to the upside as many believe it would, then we could see the pound shot higher across the board. On the other hand, a downside surprise could support speculations that the BOE would need to step in again and set a bearish tone for the pound in the next couple of days.