There was a marginal revision to the March PMI services-sector index to 52.9 from the flash reading of 52.8. Domestic influences were limited during the day with markets waiting for further evidence on the UK economy to assess whether the Bank of England will decide to push ahead with a further interest rate increase at the May policy meeting. At this stage, markets in the meantime, global trends will tend to dominate the UK currency moves.
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The final Euro-Zone services PMI index was revised down to 55.0 from the flash reading of 55.6, but there was still a solid expansion on the month. ECB council member Vasle stated that core inflation is still clearly on an upwards trend while fellow member Vujcic stated that further rate hikes may be needed. The Euro was, however, unable to make further headway after Wednesday’s European open with a slightly less confident risk tone curbing potential support.
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ADP data recorded an increase in private US payrolls of 145,000 for March and below expectations of around 200,000, although the February increase was revised higher to 261,000 from the original reading of 245,000. There were notable declines in payrolls in manufacturing with sharp reductions in financial activities and business services. Regionally, there were sharp losses in the South. There was a slowdown in wages growth with the annual increase for job stayers slowing to 6.9% from 7.2%. There was a significant downward revision to the US PMI services-sector index to 52.6 from the flash reading of 53.8. The US ISM non-manufacturing index declined sharply to 51.2 for March from 55.1 the previous month and below expectations of 54.4. There was a slowdown in the rate of business activity growth and a much sharper slowdown in new orders growth while order backlogs declined. There was only a small employment increase for the month while supply-side stresses continued to ease.
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