4th October 2017 Market Update
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?? GBP – Sterling fell to a three week low on the wake of weak data in September’s construction figures, which showed that the sector is now contracting. This coincided with the growing sense of anxiety that many traders feel as we step into the uncertainty of Britain’s exit from the EU as well as the disappointing second quarter growth figures on Friday and the poor manufacturing figures on Monday.
In focus today will be service sector figures which are expected to remain unchanged. However a disappointing figure could further exacerbate Sterling’s fall this week.
?? EUR – Little out from the Eurozone yesterday, thus very little movement either.
Focus today will be Markit services PMI, which is expected to remain the same and retail sales from the single-bloc area which is forecast to improve.
?? USD – The US dollar traded weaker yesterday in the absence of any data.
This afternoon could cause some volatility with the release of ADP employment figures, Markit services and ISM services figures.
09.30am – Services PMI: Expected to remain at 53.2
09.00am – Markit Services PMI: Expected to remain at 55.6
11.00am – Retail Sales: Expected to increase by 0.3%.
13.15pm – ADP Employment Change: Expected to drop to 130,000
14.45pm – Markit Services PMI: Expected to remain at 55.1
15.00pm – ISM Non-Manufacturing PMI: Expected to increase to 55.5
Our View: A big day for services PMIs across the board today, with the key one being the UK set. Services take up a large proportion of UK economic growth so the reading today will be closely monitored and thus could cause volatility.
Should the figures follow suit from this week’s manufacturing and construction figures and dissappoint, then we could well see Sterling continue to fall as markets may expect a delay in the Bank of England’s rumoured interest rate hike.
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