UK Services PMI will be released today9:30am GMT. Any decent deviation in the data will cause a reaction in pound.However given the pounds recent resilience and cable at multiyear lows, asignificant miss may be needed to convince traders to continue selling GBP atits current levels.
Description
The Services Purchasing Managers’ Index isa diffusion index based on surveyed purchasing managers in the servicesindustry. The survey asks purchasing manager respondents to rate the relativelevel of business conditions including employment, production, new orders,prices, supplier deliveries, and inventories. Above 50.0 indicates industryexpansion, below indicates contraction. Services PMI is a leading indicator ofeconomic health because businesses react quickly to market conditions, andtheir purchasing managers hold perhaps the most current and relevant insightinto the company’s view of the economy.
Summary
The pound has weekend dramatically sincethe turn of the year as ‘Brexit’ fears have weighed heavily on sentiment withcable falling over 800 pips before finding support at 7 year lows. As such thepound has been rather resilient in recent days despite poor results from boththe manufacturing and construction PMI’s. Services PMI is the most important ofall 3 data points and is therefore likely to have the biggest impact should thedata miss on expectations. Although from a fundamental perspective GBPmaintains a slight bullish bias, with rate hikes remaining a distantpossibility and market concerns regarding the UK’s EU referendum, the bias forGBP remains to the downside for the foreseeable future.
P.S. This release was also covered inthe weekly risk events video. You can watch it here.
At no time should anyone view the information presented anywhere on this website as advice, recommendation or proven. Everything reflected is merely opinion and may not be accurate. The purpose of the site is to express the opinions and views of Jarratt Davis. There is no intention to offer specific help, advice or suggestions to anyone reading any of the content posted here.
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