Fash: Sterling see’s strong service PMI - TD Securities

FXstreet.com (London) - Jacqui Douglas, Senior Global Strategist, Rates and FX Research at TD Securities noted this morning’s services PMI was even stronger than last week’s remarkable manufacturing and construction surveys.

Key Quotes:

“This morning’s services PMI was even stronger than last week’s remarkable manufacturing and construction surveys as it jumped from 56.9 to 60.2 in July, beating market consensus of 57.4 and our more upbeat forecast of 58”.

“This reading swamped the post-recession high of 58.4 from Feb 2010, and managed to hit its highest level since Dec 2006”.

“And along with the strength in last week’s numbers, this drove the composite PMI to 561. in July, its highest reading since the series began in Jan 1998”.

“The details of the report were also positive, as you would expect with that strong of a reading. The report mentioned better weather and a pick-up in the housing market as driving factors, and talked about strong job growth, business expansion, and “a number of reports that wages paid to staff had been raised.” This latter point is particularly important as we had highlighted weak wage growth as a downside risk to UK growth in H2, so a pick-up there would alleviate that concern”.