UK S&P Global/CIPS Composite PMI rises to 52.5 in January vs. 52.2 expected

S&P Global/CIPS PMIs for January came in above expectations.
GBP/USD climbed above 1.2750 on upbeat PMI figures.

Eren Sengezer FXStreet

Economic activity in the UK's private sector continued to expand at an accelerating pace in January, with S&P Global/CIPS Composite PMI rising to 52.5 in January's flash estimate from 52.1 in December. This print came in above the market consensus of 52.2.

S&P Global/CIPS Manufacturing PMI edged higher to 47.3 from 46.2 in the same period, while the Services PMI advanced to 53.8 from 53.4.

Commenting on the report, "the surprising strength of growth in January, which has exceeded forecasts, may deter the Bank of England from cutting interest rates as soon as many are expecting, especially as supply disruptions in the Red Sea are reigniting inflation in the manufacturing sector," said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence Supply.

"Supply delays have spiked higher as shipping is re-routed around the Cape of Good Hope, the longer journey times lifting factory costs at a time of still-elevated price pressures in the service sector. Inflation is therefore indicated to remain stubbornly higher in the 3-4% range in the near future," Williamson added.

Market reaction

GBP/USD gathered bullish momentum on the upbeat PMI readings and was last seen rising 0.6% on the day at 1.2760.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD stays well offered below 1.1800

The selling pressure on EUR/USD is picking up pace, with the pair slipping decisively below the key 1.1800 level and sliding to fresh two week lows as Wednesday’s session draws to a close. The move lower comes as the US Dollar finds renewed strength after the latest round of US data and the release of the FOMC Minutes. Next of note on the docket will be the US weekly Initial Jobless Claims.

GBP/USD reaches multi-day lows near 1.3500

GBP/USD reverses its initial upside momentum and is now adding to previous declines, approaching the 1.3500 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs near the $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Australia unemployment rate set to edge up within overall strong labor market

The Australian monthly employment report is scheduled for release on Thursday at 00:30 GMT, and market participants anticipate a modest increase in jobs in January. The Australian Bureau of Statistics is expected to announce that the country added 20K new jobs in the month, while the Unemployment Rate is forecast at 4.2%, up from the 4.1% posted in December.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.