Market News & Analysis

Market Brief: GBP hurt by poor services PMI

  • Market update: In FX, GBP and to a lesser degree EUR sold off this morning although both were off their worst lows but still down on the day following the earlier release of poor services PMI data from the UK and Eurozone. Stocks were higher, although mainland European indices came off their best levels while FTSE was up 1% at the time of writing, supported by a weaker sterling. Gold was up as German, UK and US 10-year yields fell, and the yen strengthened. Crude oil was a touch higher after two days of sharp gains. The price of Bitcoin dropped to its lowest level since May, reaching a low so far of $6930.

View our guide on how to interpret the FX Dashboard

  • Christine Lagarde gave her first proper speech as ECB’s president and although she shied away from providing any significant hints about changes in interest rates, she did call for a strategic review of monetary policy in the near future and greater fiscal spending. Read more HERE.
  • Data recap: the latest services PMI data from the UK and Eurozone disappointed expectations, hurting both the pound and the euro:
    • The Eurozone Composite PMI unexpectedly fell to 50.3 in November from 50.6 in October, worse than expected
    • Eurozone Manufacturing PMI remained in the contraction for the 10th consecutive month, coming in at 46.6 vs. 46.4 expected and 45.9 last.
    • Eurozone Services PMI fell to a 10-month low of 51.5 vs. 52.2 last and 52.4 expected
    • On a country level, French manufacturing PMI rebounded to expansion territory at 51.6 vs. 50.7 last, while services PMI was unchanged at 52.9. German manufacturing PMI improved to 43.8 from 42.1, while services PMI slowed to 51.3 from 51.6.
    • UK Flash Services PMI printed 48.6 for November, suggesting the sector contracted. It fell more than one whole point from 50.0 in October and was also worse than 50.1 expected.
    • UK flash Manufacturing PMI eases to 48.3 compared with 48.8 expected and 49.6 last.

  • Coming up:
    • Canadian retail sales: headline expected to print -0.3% m/m vs. -0.1% last; Core expected to come in at -0.1% vs. -0.2% in the previous month
    • US Markit Flash Manufacturing and Services PMIs, expected at 51.5 and 51.2 respectively
    • Revised UoM Consumer Sentiment and Inflation Expectations



Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.