UK Construction PMIs in focus

4th April 2017 Market Update

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?? GBP - Manufacturing PMIs came out 0.2 lower than previous and 0.9 lower than expected causing the pound to initially weaken. However, it then strengthened later in the day. The pound still sits at levels last seen on March 1st.

?? EUR - Unemployment figures came out better than previous, by 0.1%. The euro strengthened initially but drifted off across the day as the markets seem to be turning more of their attention to the French election.

?? USD - The main data out of the US was ISM Manufacturing data and ISM Prices Paid data which came out at 2pm. Both numbers were slightly better than expected, however the dollar actually weakened following the data, but again recovered by the end of the day.


Key Announcements

?? AUD
4.30am: RBA Interest Rate Decision – Came in as expected and remained at 1.5%

?? GBP
9.30am: PMI Construction (March)

?? EUR
10.00am: Retail Sales (YoY & MoM)
2.30pm: ECB President Draghi’s Speech


Our View: This morning, Sterling has already lost some of its gains from last week, as investors may well be anticipating continued poor performance from the UK’s construction and services sector as and when the respective PMI data is released this week.

However trading ranges remain fairly tight so any falls in the pound are likely to be small.

The South African rand’s performance over the last week on the other hand is one to note. The rand has depreciated by 9% against the pound since last week following the sacking of finance minister Pravin Gordhan and after S&P downgraded the country's debt to “junk” status. Further political instability could well continue to weigh on the currency.


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