blackfriars bridge evening

UK services accelerate

5th July 2018 Market Update

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?? GBP – Sterling jumped across the board after service PMI’s hit an eight month high suggesting the economic growth rose by 0.4% in the last three months – which is twice as fast as the first quarter. The jump in services from 54 in May to 55.1 in June also seems to have increased the chances of a rate hike in the summer.

As a result, Sterling is up marginally 0.15% against the US dollar and 0.45% against the euro on the week so far.

No further data due out today but clients will be hopeful that Sterling’s run over the last two days continues.

?? EUR – Eurozone PMI’s increased to 55.2, indicating second quarter growth of 0.5% (which is still higher than the indicated growth of 0.4% for the UK in the same quarter). The data makes up for the abysmal manufacturing figures at the start of the week but the euro still remains unchanged since the start of the week.

No data out of the Eurozone today.

?? USD – With it being Independence Day yesterday, there was no data out of the US.

However, for the rest of the week, primary focus will be on the US, with the release of ADP employment figures and service sector figures tomorrow afternoon and the release of the Fed minutes in the evening.

The key data however will be Friday’s nonfarm payroll figures as well unemployment and wage data. Current expectations on the data don’t seem to expect much change from the figures in May.


Key Announcements

?? USD
13:15pm: ADP Employment: Expected to increase to 190,000
14:45pm: Markit Services: Expected to decline to 55.4
15:00pm: ISM Non-Manufacturing: Expected to decline to 58.3
19:00pm: FOMC Minutes


Summary: The pound benefitted from a robust and strong services PMI figure, which hit an eight month high, suggesting that growth in the second quarter accelerated.
The Eurozone welcomed a similar upturn in service sector figures.


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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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