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Services PMI (MoM) (U.K.)

UK Services to Fall Below 55 PMI Points Again

Starts Saturday, August 18, 2018 at 16:06
Updated Friday, August 3, 2018
The "Services PMI" report has a massive impact on the British Pound (GBP), since it accounts for 4/5th of the UK economy. The service sector has picked up nicely in the last several months after it fell close to contraction back in April. It moved above 55 points last month, although this month it is expected to decline below that level againYesterday we saw a surprising jump in the UK Construction PMI figures which jumped from 52.8 points expected, to 55.8, but there wasn't much reaction in the market because the bank of England meeting was due in a few hours. There is a chance that the services data comes up higher than expected today after seeing the construction report yesterday, so it will be interesting to see if that has an impact on the GBP this time.

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About Services PMI (MoM) (U.K.)
The U.K. Services PMI is a statistic that measures the economic situation for the U.K. services sector. It is a key representation of aggregate sales and employment levels. In comparison to the Manufacturing PMI, the Services PMI does not impact GDP positively or negatively. PMI Services is released by two private information outlets: Markit Economics and the Chartered Institute of Purchasing and Supply.It is important to note that a value of 50 is the baseline for the Services PMI. Values above 50 are a signal of expansion, while below 50 indicates a slowdown. Market participants are partial to higher values, as this is evidence of sectoral growth.In terms of volatility, the Services PMI is a secondary metric for the U.K. Although the service industry plays a large role in the U.K.’s economy, the Services PMI release does not spike volatility in the GBP to the degree of a primary metric.

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Arslan Butt, Commodities & Indices Analyst Recent comment authors
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Arslan Butt, Commodities & Indices Analyst

Muted impact on GBP/USD. Looks like traders will wait for Nonfarm payroll before placing any trade.

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