Good day for Manufacturing Sectors

As the new month gets under way, with it comes the usual raft of data across many of the major currencies. October was a mixed month for Sterling although some positive signs were seen towards the end of the month. The markets will now be assessing all the new eco stats in the next couple weeks to determine whether the pound can find better fortunes leading up to the festive period. Monday was all about Manufacturing PMI for the big 3, UK, Euro-zone and US.

Considering recent struggles in this sector, the markets were surprised to see all PMI figures come out better than analysts’ expectations, particularly that of the UK. UK Manufacturing PMI was forecast at 51.3, just about a growth figure as above 50, but posted actual results of 55.5, the best reading since June 2014 and a welcome recovery from the slowed growth seen so far this year. This data caused a spike on GBP/EUR through 1.40 to the highest levels in over 10 weeks, although unfortunately not even this strong figure was enough to sustain these rates, such is the strength of the 1.40 resistance. Having gained so much in just a couple of weeks against the Euro due to its recent weakness, current levels represent an excellent opportunity for short term Euro buyers.

Last night in the early hours there was an interest rate decision from the RBA where as expected rates were held at 2% for another month. The day ahead includes Construction PMI for the UK at 9:30am and the rest of the UK session is then very quiet until a speech from Mario Draghi at 7pm, and latest unemployment figures for New Zealand at 9:45pm tonight.