Three PMIs, three disappointments: Markit’s services PMI for the UK falls to 52.7 points in February, significantly worse than expected and a clear warning sign. Are Brexit fears behind this slide? This is the lowest read in nearly 3 years and it implies weaker GDP.
GBP/USDÂ extends its falls to 1.4035.
With this publication, the composite picture is also clear: 52.8 against 55.7 expected. This doesn’t bode well for the pound moving forward.
Markit’s last and most important purchasing managers’ index was expected to show ongoing solid growth with 55.1 points in February, slightly under 55.6 seen in January. The services sector is the UK’s largest.
GBP/USD was trading lower towards the release, perhaps anticipating a worse than expected outcome.
Earlier this week, both manufacturing and construction missed expectations. Nevertheless, the pound enjoyed the better market mood and certainly recovered.
Later today we also get the services PMI from the US, and this could be huge.
This is how it looks on the chart. Note that the fall began before the release. 1.40 serves as support, followed by 1.3960.
