Spreadex Market Update
FTSE falls ahead of UK services PMI, but still holds above 6900
The figure is broadly expected to follow the same ‘recovery’ trend as its PMI peers, with analysts expecting a jump from 47.4 in July to 49.1 in August. Given, however, the supersized increase made by the manufacturing survey and, to a lesser extent, the better than forecast rise in construction, the services reading may be under a different pressure, something only compounded by the fact it is arguably the most important PMI of the three.
There are clearly a few jitters about the figure out there on the markets this morning, with the FTSE falling around 20-30 points after the bell. That drop is likely in part also due to the fact that the index climbed a spectacular 2% on Friday, sending the FTSE back above 6900 for the first time since the middle of August and therefore leaving it plenty of room to topple lower.
While the focus is undoubtedly on the FTSE’s services PMI this Monday the Eurozone does get involved with its own surveys this morning. Already the Spanish figure has surpassed estimates, its services PMI coming in at 56.0 against the 55.1 forecast; Italy, on the other hand, is set to trickle lower, from 52.0 to 51.8 month-on-month, while the French and German readings are expected to match their initial readings at 52.0 and 53.3 respectively. The prospect of this has pushed the CAC and DAX slightly higher, the former rising nearly half a percent to near a 3 week higher with the latter climbing a more mild 0.2%.
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