The Report That Can Predict the Future
British Pound moderation ahead of Services PMI today AND BoE tomorrow
Looking at the key UK services PMI, we see GBP giving up some of its gains seen in recent sessions, with the upcoming BoE meeting/announcement also playing its part in some profit taking, as well as pre 1.3400 selling.
1.3400 has been highlighted as a key level for sellers, with much larger orders seen from 1.3500. Stops seen through here, and given the AUD reaction seen to the RBA rate cut earlier in the week, the potential for a similar reaction here is likely with the market fully pricing in a 25bp cut move allied with expansion in the APP. EUR/GBP has been pressed back into the low .8400’s as seen in NY trade yesterday, with Cable pushed up to 1.3355-60 levels, but seeing some decent resistance up at these levels at the time.
Key Data Today
The key DATA today is the US Non-Manufacturing ISM and ADP report which may decide on strength of the US dollar.
09:30 – final UK Services PMI – flash PMI for July showed slump to 47.4 pts and probably the final reading will confirm that disappointing result.
13:15 – ADP non-farm employment change – market calls for adding 170k jobs while previously we saw increase by 172k. The ADP report is usually a good indicator ahead of NFP reading.
15:00 – US Non-Manufacturing ISM – service sector sentiment is out today to close out the measures of July sentiment. Consensus calls for 56.0 from 56.5 last month. Despite some weakness in sentiment headlines, stronger component data look poised to leave sentiment on a stronger footing in July.
15:30 – DoE oil inventories data – market expects a decline by 2 MM barrels. API estimates suggest draw of 1.32 MM barrels.
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