The UK reopening in mid-July has helped drive an upward revision for the services PMI, lifting the pound in the process. Meanwhile, a collapse in the ADP payrolls reading does raise questions over bullish predications for Friday’s payroll release. 

  • US markets lag after disappointing ADP figure
  • European services PMI revised lower
  • UK services sector shows strong reopening rebound

European markets are on the rise in a somewhat volatile day for financial markets. With Friday’s jobs report coming into view, we have seen a raft of economic data points released to provide us with a fresh update on the ongoing recovery. Certainly today has provided mixed signals over how the headline payrolls figure will move, with a sharp decline in the ADP payrolls figure counteracted by rising employment expansion within both the manufacturing and services ISM PMI surveys. However, with the ADP falling sharply lower, we have seen treasury yields decline which has ensured outperformance for the Nasdaq. From a mainland European perspective, disappointment across the board saw downward revisions across eurozone services PMI surveys. Meanwhile, the latest retail sales figure also fell short of expectations. 

Despite some unwelcome data out of the eurozone and US, the UK has enjoyed a relatively upbeat day after a strong upward revision to the services PMI. The UK’s reliance upon the hard-hit services sector saw the country experience one of the biggest downturns of any developed nation. However, with the UK reopening bringing an uptick in demand for the services sector, it is likely that we will also see growth receive a boost as we go forward. From a market perspective, the outperformance of UK services has provided a lift for the pound, with EURGBP heading lower over the session. That sterling strength does undermine the FTSE 100 pricing, with the main UK index falling short of mainland European gains. After all, the weakness we have seen across eurozone and US data does take some of the heat off the likes of the ECB and Fed and they consider taper timelines.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD remains pressured after US data misses estimates

EUR/USD is trading closer to 1.1750, paring its recovery from earlier in the day as the safe-haven dollar is bid. US Consumer Sentiment missed estimates with 72 points in September. The financial woes of China's Evergrande are weighing on sentiment.


GBP/USD trades under 1.38 amid on UK data, dollar strength

GBP/USD is on the back foot, trading under 1.38 after UK Retail Sales figures disappointed with -0.9% in August, worse than expected. Brexit uncertainty and dollar demand weighed on the pair earlier. 


XAU/USD surrenders intraday gains, drops closer to $1,750 level

Gold struggled to preserve its intraday gains and dropped to the lower end of the daily trading range during the early North American session. 

Gold News

Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

The latest development in the ongoing SEC vs. Ripple lawsuit is that documents are classified as privileged and blocked for public viewing. Though institutional investors are yet to take big bets on the altcoin in 2021, retail investors are actively trading in XRP.

Read more

US Michigan Consumer Sentiment Preview: Markets will have to look hard for positive signs

Consumer outlook expected to rebound to 72.2 in September. August’s 70.2 was the lowest since December 2011. Inflation and Delta variant wearing on US optimism. Markets face negative dollar risk from fading consumer optimism.

Read more