Another positive surprise: the UK construction sector is only in a light contraction mode, not an outright plunge. The construction PMI jumped by 3.3 points to 49.2, much better than forecast. The score is still under 50 points, the level separating growth and contraction. Nevertheless, it shows that even in this sector, which suffered withdrawal freezes in property funds, things are not so gloomy.
GBP/USD made a move towards 1.33, but retreated. Were traders expecting a bigger surprise following yesterday’s shockingly positive manufacturing sector report? Or is the tension towards the NFP limiting any gains?
Markit ´s construction PMI for August 2016 was officially expected to rise to 46.1 from 45.9 in July. However, the huge 5 point bounce seen in yesterday’s manufacturing PMI probably raised expectations from this release. Surveys following the Brexit vote showed a very worried business community, while the actual economic figures were much better. The mood is playing a game of catch-up with the data.
GBP/USD traded steadily in its new higher range around 1.3275. Tension is mounting towards the big announcement of the day: the US Non-Farm Payrolls.
See how to trade the US NFP with EUR/USD
On Monday, Markit releases the services PMI. It tends to have the biggest market impact, due to the sheer size of this sector.
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