The UK’s construction PMI is in contraction but not as terrible as forecast. The score slides from 46 to 45.9, yet this is much better than a devastating 43.8 score that was predicted. Did the relative calm after the gating of property funds help alleviate fears? Or was it the formation of a new government?
GBP/USD is ticking higher. The move is worth about 20 pips. Perhaps markets are waiting for the services PMI tomorrow.
This is the lowest level since 2009 and employment in this sector is now also in contraction territory, at 49.3 points. However, there is a move higher in the Housing Activity component.
Markit’s purchasing managers’ index for the UK was expected to further deteriorate and score only 43.8 points, well within contraction zone. In June, this PMI already reflected some of the Brexit outcomes, crashing to 46 points. The 50 point threshold separates growth and contraction.
GBP/USD traded just around 1.32 after making a move higher only to return to the same place.
The housing sector led the recovery a few years ago and it was the first to be hit by the EU referendum. A few property funds announced withdrawals freezes.
The manufacturing sector is not doing too well. The final PMI released yesterday showed a deeper drop than initially reported. The most important PMI comes out tomorrow, for the services sector. When the special report came out 10 days ago, it was a big shocker. Brexit had a big and damaging impact on business confidence in the UK’s largest sector.
See how to trade the British UK Services PMI with GBP/USD
