Weak UK PMI

The Day So Far

This morning sees a China-free market and thus market volatility on the whole has been fairly subdued. Notable releases during the session was the continued weakness in the Australian Dollar, down 0.3% due to poor retail sales figures.We saw a host of European data this morning in the form of Composite and Services PMIs. the majority beat estimates across the board with Spain and Italy beating forecasts by impressive margins. This has allowed some positive sentiment to creep into European equities and, with a lack of Chinese depression syndrome, indices have remained elevated.both major European bourses trading higher on the session, the DAX and ESTOXX closing their gaps set on the 31st.However, a lack of appetite to break out of their respective ranges reflects the uncertainty headed into the afternoon session. With the ECB rate announcement and press conference scheduled later on this afternoon there has been talk of future extensions to the ECB's QE programme. Whilst this is a negligible risk for today's meeting, market participants will have all eyes on the press conference as Draghielaborates on the central bank's plans going forward. We also had the UK Services PMIs break the trend as we saw a miss of expectations by 2.1 points. This reading sent GBPUSD lower to test S2 before reversing higher, stripping out S1 as it tested pivot off of a volume push to the upside.

The Afternoon View

Looking ahead into the afternoon and the US session we have several data points worthy of note. Aside from the US Trade Balance we have the usual release of US Initial Jobless Claims, Composite and Services PMI, followed by ISM Non-Manufacturing. Services are expected at 55 and the ISM Non-Manufacturing number expected at 58.2. Traders are reminded that with the press conference ahead it would be both wise and prudent to limit expectations before the afternoon session gets going in earnest. Best of luck for the session ahead.