Intraday Market Thoughts

GBP Hit by PMI & GDP Revisions, Onto ISM Services

by Patrik Urban
Dec 5, 2012 14:19

GBP Hit by Treasurys downward revision to 2012 GDP & by weaker PMI, German and EZ services PMI revised higher; EZ retail sales decline; UK services PMI weaker. Nov ADP slowed to 118K, ISM services, factory orders and RBNZ rate decision. Yen crosses from latest premium Insights remain in progress and so are both EURUSD trades.

USD is mixed in the ongoing session. It is weaker against NZD and JPY, stronger against EUR, CHF and CAD and unchanged against AUD and GBP. European equities are gaining around 0.2%

European data was mixed today. German services PMI was revised substantially higher to 49.7 from the initial estimate 48.0 and Eurozone services PMI was revised to 46.7 from 45.7. However, Eurozone October retail sales declined 1.2% from prior -0.6%. EURUSD trades near session lows around 1.3080.

The service sector in the UK expanded but less than analysts anticipated. The PMI index declined in November to 50.2 from previous 50.6 which is the slowest growth in 23 months. New business volumes declined for the first time in nearly two years and the level of confidence fell to 11 month low. GBP traders also await the Autumn forecast statement at 7:30 am ET. GBPUSD is little changed around 1.6110 and EUR/GBP fell to 0.8116.

The UK office for Budget Responsibility downgraded its 2012 GDP fcst to -0.1% from the initial 0.8% reading.

Spain sold EUR 4.25 bln worth of 2015, 2019 and 2022 bonds vs. EUR 3.5-4.5 bln target. Average yields declined. Nevertheless, Spanish 10 year yield rose to 5.375%.

US Nov ADP employment slowed to 118K from Octobers revised 157K. Mkts expected 125K. The negative effect of Hurricane Sandy was estimated about 86K jobs.

ISM non manufacturing at 10:00 am is seen slightly lower at 53.6 from 54.2 but the decline could be larger because of hurricane Sandy. Factory orders are anticipated flat in October after growing 4.8% during the prior month.

NZD traders await the RBNZ rate decision and a statement that is due at 3:00 pm. Most market participants see rates unchanged at 2.5%.

Latest Premium Insights await the 1.05 target on AUDUSD, with other calls on EURUSD (2), GBPUSD (2), EURJPY (2), CADJPY (1), EURGBP (2), Gold (2), Silver (2), US Crude CL_F (2). DIRECT ACCESS here Non subscribers can click here:


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