UK S&P Global Services PMI returns to growth in July, arrives at 51.8

Sagar Dua FXStreet

According to preliminary data, the United Kingdom (UK) S&P Global Services Purchasing Managers’ Index (PMI) arrives above 50.0 in July, a figure that separates expansion from contraction, after declining in June. The Services PMI lands at 51.8, while it was expected to come in higher at 49.4 from 48.8 in June.

The Composite PMI also returns to growth due to a strong increase in both manufacturing and services sector activity. The overall business activity arrives at 52.1 from 49.7 estimates and the previous reading of 49.3. The Manufacturing PMI expands at a surprisingly faster pace to 52.8. The data was already expected to grow but at a moderate pace to 52.0 from the prior reading of 52.5.

“UK businesses reported stronger activity in July, pointing to a faster pace of economic growth at the start of the third quarter. “Hospitality companies saw demand boosted by good weather, the FIFA World Cup and more domestic holidays, as high costs and uncertainty continued to deter some foreign travel. However, overall services growth remained lacklustre amid cost-of-living pressures. Unusually for recent years, manufacturing is now growing faster than services, buoyed by rising exports," Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said.

Market reaction

A slight selling pressure is seen in the British Pound (GBP) after the PMI data release. At press time, GBP/USD trades 0.1% higher to near 1.3326.

Economic Indicator

S&P Global Services PMI

The Services Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging business activity in the UK’s services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Pound Sterling (GBP). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for GBP.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.