Sterling the focus after PMI
Sterling retreated against its major trading partners yesterday after a fall in the service sector purchasing managers’ survey (PMI) for January. The headline number surprised to the downside dropping from 60.6 in December to 59.2 in January; a reading above 50 indicates expansion.
The headline number was accompanied by small decreases in the new business, employment and expectation measures. The market witnessed a 10 year high in the December survey and an equally robust number for January would have signalled a significant hawkish stance on interest rates.
The input and output indices both increased so the overall picture is that inflationary impacts as a result will be monitored closely. We expect Merve the swerve et al to keep things as they are at 5.25% on Thursday.
All eyes are on the rate announcements on Thursday from the Bank of England and the ECB respectively, so things look to be a little dull until then. In the US yesterday, the January survey of non-manufacturing activity from the Institute for Supply Management was strong but had little impact on the dollar into afternoon trading.
The G7 meeting later this week provides something else to talk about; policymakers are expected to express concerns about massive growth in yen-funded carry trades which have put downward pressure on the Japanese currency.
On the data front we are a little light today. Euro zone retail sales and German factory orders keep us awake this morning, but again Thursday is the day.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
The headline number was accompanied by small decreases in the new business, employment and expectation measures. The market witnessed a 10 year high in the December survey and an equally robust number for January would have signalled a significant hawkish stance on interest rates.
The input and output indices both increased so the overall picture is that inflationary impacts as a result will be monitored closely. We expect Merve the swerve et al to keep things as they are at 5.25% on Thursday.
All eyes are on the rate announcements on Thursday from the Bank of England and the ECB respectively, so things look to be a little dull until then. In the US yesterday, the January survey of non-manufacturing activity from the Institute for Supply Management was strong but had little impact on the dollar into afternoon trading.
The G7 meeting later this week provides something else to talk about; policymakers are expected to express concerns about massive growth in yen-funded carry trades which have put downward pressure on the Japanese currency.
On the data front we are a little light today. Euro zone retail sales and German factory orders keep us awake this morning, but again Thursday is the day.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Labels: Bank of England, ECB, G7, Sterling
posted by Drs Search @ 9:15 AM
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