- GBP deepens declines following yesterday’s collapse of Brexit talks and feeble services PMI
- European stocks market remains under pressure as tech sell-off spreads
- The USD awaits a release of non-manufacturing ISM, which begins a series of important data from the US economy scheduled for this week
The British pound was the weakest currency amid G10 basket this morning as we got a feeble services PMI and Brexit talks disappointed. Moreover, sentiment on European equity markets was mixed due to further sell-off in techs stocks, however, investors had a better attitude towards value companies. Lower commodity prices also could undermine moods.
In defiance of expectations, UK services PMI slid from 55.6 to 53.8 in the past month while economists had forecast a reading of 55. A bleak release has added pressures on the British pound was the weakest currency in the G10 being also depressed by the Brexit-related story. Today’s release could be a reason to think that the GBP is not already out of the woods.
The Antipodean currencies did well in the morning leading gains among G10 currencies - AUD rose as much as 0.6% and NZD about 0.5% against USD. Aussie benefited from strong macroeconomic data and a possible change in the RBA’s rhetoric. In case of Kiwi, signals from a central bank were also important. Upbeat PMIs from China offered a support as well.
Global sentiment deteriorated somewhat as tech shares came under selling pressure. On the other hand, investors showed more interest in value stocks with financials in the led. However, after a halfway of today’s session, most of the European indices were in the red.
Looking ahead, we’ve got the US non-manufacturing ISM. This release should be important for USD as services are the largest sector of the US economy. Besides, the American Petroleum Institute will release its weekly report on a change in oil inventories which as usual could help set expectations ahead of the governmental report on Wednesday.
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