Spreadex Market Update
UK services shock sends sterling to 7 week high against dollar
Matching its manufacturing peer for shock-factor the UK services survey surged back to 52.9 in August from 47.4 in July, far higher than the 49.1 estimated by analysts. As has been the trend of late the pound took most of the juice from this news, jumping around 0.3% against the dollar and the euro to hit 7 week and 1 month highs respectively. The FTSE, on the other hand, fell by 20 points, suffering its usual post-pound push malaise. The UK index shouldn’t feel too dejected, however; it’s still near 6900, while its oil and mining stocks are currently enjoying a strong start to the week thanks to Brent Crude’s 3% rise.
Interestingly the services situation was a bit shakier over in the Eurozone. While Italy, Spain and France all beat expectations Germany suffered a surprise decline month-on-month, slumping to 51.7 in August from 54.4 in July. This dragged the region-wide PMI to a 19 month nadir of 52.9, and helped halve the DAX’s growth from 0.4% to 0.2% as the morning went on, the index likely only remaining in positive territory thanks to a better than forecast increase in Eurozone retail sales to 1.1%.
Sadly that’s about it for scheduled intrigue this Monday. The US Labor Day break leaves this afternoon looking pretty empty, meaning investors will have to milk this morning’s services data for all its worth.
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