A Hectic Day for the Markets Ahead

Yesterday saw another weak UK PMI figure for September, this time construction, putting pressure on sterling. The index fell to 48.1 (forecast was 50.8), suggesting the sector declined at the end of Q3. Construction has struggled since last year’s Brexit referendum outcome.

Previous Day's Market Highlights

Yesterday saw another weak UK PMI figure for September, this time construction, putting pressure on sterling. The index fell to 48.1 (forecast was 50.8), suggesting the sector declined at the end of Q3. Construction has struggled since last year’s Brexit referendum outcome.

We saw GBP/EUR move down below 1.13. Likewise, EUR/USD moved above the mid-point of the 1.17-1.18 range. Meanwhile, GBP/USD was little changed on the day. It opens this morning close to 1.3280.

In the day ahead, the main release today is UK services PMI for September. While it is not expected to show any change from August, downside misses by other UK PMI indices earlier in the week mean a similar result today cannot be ruled out. This could put further pressure on sterling.

Investors are also looking ahead to Friday’s key US employment report for September.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1317 1.1417 1.0836 4.43%
GBP / USD 1.3268 1.3664 1.2916 2.65%
EUR / USD 1.1735 1.2093 1.1718 0.14%
GBP/AUD 1.6956 1.7050 1.6165 5.19%
GBP / NZD 1.8545 1.8742 1.7916 3.51%
GBP / CAD 1.6612 1.6728 1.5837 5.33%

Today's Market Highlights

Today’s busy economic calendar begins with a plethora of Services PMI figures from around the Eurozone. Figures for Spain, Italy, France and Germany are released from 8:15 onwards however the main focus is likely to be on the overall EU figure, released at 9:00AM, forecast to show continued expansion with a reading of 55.6.

Sterling traders will be focusing on the release of UK Services PMI at 9:30AM. Expansion is forecast with a print of 53.2 however a figure lower than this, or a reading showing contraction in the industry, will likely see a further sell off of the pound and see August’s gains all but erased.

The US session sees the release of ADP Non-Farm employment change for September at 1:15PM, forecast at 131k, as well as the release of US Services and Non-Manufacturing PMI figures at 2:45PM and 3:00PM respectively - expansion is forecast in both sectors. The afternoon session is rounded off with speeches from both ECB President Draghi and Fed chair Yellen. Markets will be watching closely for any hints towards future monetary policy direction, or an unwinding of the QE programme in the Eurozone. 

Today's Economic Calendar

Time Currency Release Consensus Previous
08:00 EUR Non-monetary policy’s ECB meeting
09:00 EUR Market Services PMI (Sep) 55.8 55.6
10:00 EUR Retail Sales (YoY) 2.6% 2.6%
13:15 USD ADP Employment Change (Sep) 125K 237K
14:45 USD Market Services PMI (Sep) 55.1 55.1
18:15 EUR ECB President Draghi’s Speech
20:15 USD Fed’s Yellen Speech