Less than a week before the elections, we get yet another disappointing figure: UK Manufacturing PMI falls to 51.9 points, significantly worse than expected.
GBP/USD slides around 40 pips to 1.5335. It is still within the high range though. Liquidity remains thin.
The manufacturing sector has always been the weakest link in the UK recovery and is a smaller sector than services. Nevertheless, this score reflects very poor growth. Joining the weak GDP for Q1, it seems that the UK is not on a path to resume its strong growth but too see further slowdown.
Markit’s manufacturing purchasing managers’ index for April was expected to stand at 54.6 points, similar to the 54.4 points recorded in March.
GBP/USD was trading a bit higher towards the publication, rising to 1.5380, but off the highs seen a few days ago.
More figures were released at the same time:
- Net lending to individuals carried expectations for a rise to 2.6 billion. The actual number is 3.1 billion, better than predicted.
- M4 Money Supply was forecast to rise 0.1%. The actual number is +0.3%.
- Mortgage Approvals were predicted to rise from 62K to 63K. The actual figure is 61K.
6 days are left before the parliamentary elections. The race still seems very tight, with no party making the break. This will captivate markets next week.
The recent rises in cable are related to the US dollar’s weakness on the poor GDP report, and the consequent mini-correction to the comeback of the greenback.
Brits enjoy a public holiday on Monday, while most of Europe is on holiday today due to May Day.