Services PMI

The UK services sector offered up further signs of a January economic rebound Wednesday when the IHS Markit PMI was revised to its highest level since September 2018 although the path ahead is littered with risks that could easily snuff out any tentative recovery. 

The British Pound heads into Friday's crunch flash PMI data release riding high, with the UK currency notching up gains against all the major currencies over the course of the past month. Disappointing data will see the currency come under notable pressure.

The UK services sector provided proof on Monday of some life being left in the economy at year-end when the IHS Markit PMI was revised higher for the December month, after output stablised following a decline in the prior month. 

The UK economy looked to have been in reverse gear in November, with the first ever set of flash PMIs from IHS Markit showing the dominant services sector contracted.

The largest component of the UK economy - the services sector - saw activity improve in October according to a much-watched survey.

The UK economy's dominant services sector - which accounts for over 80% of economic activity - shrank in September as an economic slowdown deepens.

The latest UK services PMI came in stronger than analyst expectations thanks largely to a pick-up in new orders from overseas.

The British Pound was seen under selling pressure in mid-week trade after the release of data that showed the UK's dominant services sector struggled in June.

Pound shows an initial positive reaction to Service PMI beat but we expect the gains to be limited as the details of the report are actually quite poor.

The UK Services PMI for January read at 50.1 according to a report released by IHS Markit on February 05, a figure that places the UK economy's largest sector marginally in growth territory with anything below 50 signalling contraction.

The British Pound is seen trading with a bid ahead of the release of Service PMI data, suggesting to us that the jitters sparked by the 'flash' trading event in Asia mid-week has failed to materially damage the currency's prospects.

The IHS Markit Service PMI for November read at 50.4; a few ticks away from the 50 figure that marks the watershed between expansion and contraction.

The Pound pared earlier gains during the opening session of the week after IHS Markit data appeared to show activity within the U.K.'s largest economic sector cooling at the beginning of the final quarter. 

What the Pound needs is May to deliver a statesman-like, error-free and compelling speech, one that assures markets that they won't have to face the uncertainty of another general election and one that suggests May will ultimately prevail in pushing her Brexit plan across the line.

The Pound shrugged off a surprisingly strong increase in the IHS Markit services PMI for August, which pointed to robust growth in the UK's largest economic sector, as uncertainty over the trajectory of the Brexit negotiations and a "risk-off" mood across markets kept Sterling under pressure during morning trading Wednesday. 

Foreign exchange markets will be eyeing the release of service sector PMI data for guidance on whether or not the British Pound's recent sell-off should be extended.

The Pound about turned and sank lower against a basket of comparable rivals during the morning session in London Thursday after the all-important services sector PMI fell much further than was expected for the month of March.

The Pound is rangebound in early London trade on Thursday, January 4 but markets could spring to life on the release of the all-important services PMI due at 09:30.

Tuesday’s data comes alongside heightened uncertainty for the Pound after PM May's last-ditch effort to move Brexit negotiations onward fell apart in Brussels Monday.

The deterioration of the all-important services sector in August could now mean concerns for the economy become more broad-based.