The UK construction PMI overview/ Carney’s testimony
The UK construction PMI for November is due for release today at 0930GMT, with the figure expected to come in at 52.5, down from October’s 523.2 reading.
Just ahead of the data release, at 0915 GMT, the Bank of England (BOE) Governor Mark Carney is due to testify about the Brexit Withdrawal Agreement along with the three Deputy Governors Broadbent, Cunliffe and Woods before the Treasury Select Committee (TSC), in London.
The main focus will be on the Brexit agreement and not much is expected on the monetary policy, as Carney would like to sidestep amid ongoing Brexit uncertainty.
Deviation impact on GBP/USD
Readers can find FX Street’s proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 45 pips in deviations up to 2 to -2, although in some cases, if notable enough, a deviation can fuel movements of up to 70 pips.
How could affect GBP/USD?
Technically, the pair looks to extend the recent rally above the 1.2750 (5-DMA/ key upside barrier) above which the next resistances are seen at 1.2779 (10-DMA) and 1.2800 (round number). On the flip side, a break below 1.2699 (Dec 3 low), GBP/USD could retest 1.2676 (daily S1) en route 1.2650 (psychological level).
A better UK construction PMI report cannot be ruled today, given Monday’s stellar manufacturing PMI numbers. The construction PMI has widely shown the similar behavior as the manufacturing and services PMIs, analysts Societe Generale pointed out in a research note. However, the reaction in the GBP is more likely to be driven by Carney’s take on the Brexit agreement as the data could have a little impact on the Cable.
Market themes of the Day: Carney’s Brexit testimony highlights the day
UK: Focus on BoE speak and construction PMI – TDS
GBP futures: bearish with caution
About BOE Governor Carney
Mark Carney is Governor of the Bank of England and Chairman of the Monetary Policy Committee, Financial Policy Committee and the Board of the Prudential Regulation Authority. His appointment as Governor was approved by Her Majesty the Queen on 26 November 2012. The Governor joined the Bank on 1 July 2013.
About the UK construction PMI
The PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics shows business conditions in the UK construction sector. It is worth noting that the construction sector does not influence, either positively or negatively, the GDP as much as the Manufacturing sector does. A result that values above 50 signals appreciates (or is bullish for) the GBP, whereas a result that values below 50 is seen as negative (or bearish).