Falling to a 5 month low of 53.3, the UK services PMI was the latest figure to show signs of a slowdown in the first quarter. When factored in with the week’s manufacturing and construction readings the UK’s Q1 growth would currently sit at 0.4% (or below), a sharp drop from the 0.7% the country managed in the final quarter of 2016.
None of this news was welcomed by the pound. Cable saw its losses increase to 0.3%, digging sterling deeper into its 6 week low against the greenback, while against the euro the pound plunged by 0.7%, pushing it to its worst price in nearly a month. Interestingly this pound-weakness couldn’t substantially improve things for the FTSE, which remained down by around 20 points as the morning progressed.
Part of the reason sterling’s slide against the euro were so aggressive was that the Eurozone’s own services PMI hit a near 6 year peak of 55.5 (a smidge lower than what was forecast). This prevented the DAX from getting out of the red, the German index shedding 30 points; the CAC, however, managed to rise 0.5% thanks to the most recent French election polls placing Emmanuel Macron ahead of Marine Le Pen in the first round of voting.
Looking ahead to the US open and, after giving back 100 points yesterday evening, the Dow Jones is set to start the session flat-ish at 21000. The US has its own services data to deal with this afternoon; the Markit reading is forecast to slip from 55.6 to 53.9 month-on-month, while the ISM number is set to remain unchanged at 56.5.