Tuesday 23rd June 2020 - 15:03 (BST)
Preliminary readings for both US and UK manufacturing PMI have beat initial estimates, with activity levels pushing back into expansion territory for June. Although reduced in recent years, both countries GDP are still heavily influenced by the sectors performance and the latest readings have kept economists hopes of a post Covid-19 “v-shape” recovery alive.
In the US, figures from Markit Economics showed a flash reading of 49.6 for the month – significantly above 39.8 in May and beating the 48.0 market consensus. The influence of economic data over exchange rates remains significantly lower than Presidents Trumps twitter account, with recent comments regarding the US/China trade deal strengthening USD.
Whilst the flash report from IHS Markit earlier today showed UK manufacturing PMI at 50.1 for June, compared to 40.7 last month and way above the 45.0 level forecast. GBP remains range-bound following the news as EU-UK Brexit talks stall and investors continue to bet on negative interest rates from the BoE.
Elsewhere, there were early signs of recovery within the service sector following positive preliminary PMI readings on both sides of the pond. This coincided with the UK governments announcement of a relaxing of the 2-metre social distancing rule and plans to re-open more areas of the economy. As of July 4th, pubs, cafes, outdoor playgrounds, cinemas, museums and hairdressers will be able to start trading again, albeit under strict guidance on personal protective equipment and measures.
