Release Explanation: The activity level of Purchase Managers. They are surveyed on production, employment, inventories, orders, and delivery data. The PMI is split into reads on Manufacturing, Service, and Construction industries. A read over 50 denotes growth. “As an indicator of economic performance the PMI has the ability to easily affect currency valuations as Institutions re-align existing positions, or build new ones, on the strength of these reports,” Trade Team said. Trade Desk Thoughts: The U.K. construction PMI increased more than expected for a second month in a row. April’s Construction PMI gained 7.2 points, to 38.1, one of the biggest month over month gains on record. In February the index hit an all-time low. 

The release points to a slowdown in the pace of contraction in the U.K. housing market, something that was also seen in the U.S. releases. However, analysts say that the bottom in the construction sector is still far off, since the economy still lacks credit and liquidity, despite the recent decisions taken by the BoE

Forex Technical Reaction: The pound gained 30 pips after the news release. During the European session, the pound rose 100 pips, breaking above Monday’s high.