Spreadex Market Update

Pound in doghouse once again as construction PMI slips into contraction territory



The pound took another hit this Tuesday, with the latest UK construction PMI tipping into contraction territory.

While yesterday’s manufacturing PMI wasn’t great, and signalled a slowdown at the end of Q3, at 55.9 it was still pretty solid. Not so its construction PMI peer, which came in far worse than forecast at 48.1, a whole 3 points below August’s 51.1. It’s another example of the suffocating effect Brexit – and, remember, this is just based on the uncertainty before the split – is having on the economy, and will have investors worried about the state of tomorrow’s arguable more important services reading.

Sterling slipped 0.2% against both the dollar and the euro after the PMI was released, dipping to a fresh near 3 week low of $1.325 against the former while ducking the wrong side of €1.13 against the latter. This green lit some more growth from the FTSE, though not a lot, the index pushing towards, but not reaching, 7450 with a 0.2% rise.

As for this afternoon, there’s not really a lot on bare a speech from Federal Reserve Governor Jerome Powell (which, admittedly, could give the dollar cause to move dependent on how hawkish he sounds). A lack of news likely won’t stop the Dow Jones hitting another record high after the bell, with the US index eyeing 22600.

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