The last flash readings of the year for closely watched industry surveys have pointed to further weakness in both the manufacturing and service sector - although this pessimistic outlook may be a little misleading:
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UK Flash Manufacturing PMI: 47.4 vs 49.1 exp. 48.9 prior
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UK Flash Services PMI: 49.0 vs 49.6 exp. 49.3 prior
The latest PMI readings from the manufacturing and service sector extend the run of soft data points in these industries. However, as these don’t reflect what has been taken as a market-friendly election outcome they could be a little misleading. Source: XTB Macrobond
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These data points are often keenly viewed but due to them not capturing last week’s election result they are of secondary importance this time out. It would not be at all surprising to see significant upwards revisions to these flash estimates later this month, with the markets and business in general reacting positively on the whole to the Coservative victory last week and the final readings should reflect this improvement in sentiment. The pound has fallen to its lowest level of the day against both the Euro and US dollar in response but remains firmly above the level seen before last week’s exit poll was released and it seems like traders will still likely view any weakness as a buying opportunity - at least in the short term.
GBPUSD has fallen to its lowest level of the day since the data, trading almost 90 pips below the earlier high. However, price remains above Friday’s low of 1.3306 and comfortably higher than the level traded before the election exit poll indicated a large Conservative majority near 1.3170. Source: xStation
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