The Pound Sterling (GBP) faces a sharp sell-off as uncertainty over the Bank of England’s (BoE) restrictive monetary policy stance persists due to deepening risks of a technical recession in the United Kingdom.
Markets got some reprieve today after last week’s heavy correction amid an empty eco calendar. These conditions will remain at play throughout the week, rerouting market focus to things like US supply, central bank speeches, risk sentiment or just underlying momentum. Technical considerations come in to play as well.
Global PMI’s took center stage today. The eurozone composite measure increased from 46.7 to 47.1 (vs 46.5 expected). The minor increase ended a 4-month decline which took the PMI from a solid 54.1 in April to current contraction levels. The EMU services PMI followed a similar path, gently rebounding from 47.9 to 48.4. The EMU manufacturing PMI stabilized around 43.4, marking the 15th consecutive <50 print. Details showed a further deterioration in the order situation with companies still reducing the stock of purchased goods.