Construction PMI today will be less important than tomorrow’s Services PMI data, which in turn should be eclipsed by the data on super Thursday. It’s certainly been built up enough, hopefully the trio of BoE Rate decision, the minutes and the inflation report will cause the pound to jump around at least a little. It’s recently remained within fairly tight ranges, but holding up well above 1.55 and 1.42 against the dollar and euro respectively. Sterling remains moderately supported due to an undercurrent of hawkish expectations, which leaves the door open for some fairly nasty moves lower for the pound should rate hike expectations be pushed back (remember at one point expectations were that we would have hiked months ago).
Manufacturing PMI data from the ISM missed expectations but remained in expansion territory, which combined with on-point Personal Spending and Core PCE readings meant little fundamentally-led movement for the dollar. Today’s Factory Orders released later this afternoon isn’t typically a market mover unless wildly out of whack – tomorrow’s Trade Balance and more importantly Friday’s Non-Farm Payrolls are less likely to disappoint in the volatility stakes. The market view is quite strongly skewed in the dollar’s favour, especially against higher risk currencies like CAD, NZD and AUD, commensurate with expectations of imminent hawkish policy change from the Fed.
In what often precedes an actual downgrade, Standard and Poor’s revised the outlook for the EU from ‘stable’ to ‘negative’, citing downward economic pressure on the three largest budgetary contributors – Germany, France and the UK. ECB data showed that the central bank purchased €61.3bn of public and private debts under the QE programme in July – slightly more than the €60bn planned, which was taken as a sign that the central bank were keen to calm the market caused by Greek uncertainty. The reopening of the Greek stock market went pretty much as expected – everything got hammered. Spanish Manufacturing PMI yesterday missed expectations printing its lowest reading since November 2014, but this morning’s Spanish Unemployment number was much better than analysts were expecting.
Telegraph – Former City trader gets 14 years for rigging rates.
BBC – Government sells £2.1bn of RBS shares.
FT – Young people more demanding over salaries.
Pound Sterling (GBP), Euro Currency (EUR), US Dollar (USD) exchange rates commentary is provided by Argentex (Ag-Fx.com)