Release Explanation: Measures the activity level of Purchase Managers, they are surveyed on production, employment, inventories, orders, 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, on the strength of these reports.
Trade Desk Thoughts: The U.K. Service PMI beat analysts’ expectations for a third consecutive month. However, the release still shows the service side of the economy has contracted for more than ten consecutive months, near the fastest pace seen in the last decade. The PMI report only compounds the economic woes, as a staggering percentage of the U.K. economy is service based. The employment sub-index is barely holding near record low values.
Forex Technical Reaction: The pound traded very volatile in the European session, but overall, did not manage to pull any important breakouts. Against the euro, the pound strengthened 40 pips.