UK Markit construction PMI unexpectedly fell to 51.2, a near three-year low and contrary to the median forecast for an unchanged 52.0 reading. The survey also revealed the first drop in new orders since April 2013, although job hiring hit a four-month high. Markit reported that businesses noted a general slowdown in market conditions and delays to client decision making ahead of the EU referendum, though 51% of respondents expect a rise in output over the next 12 months and only 14% expecting a fall. Yesterday’s manufacturing PMI surpassed expectations in rising to 50.1 in May from April’s cycle low of 49.2, but the survey nevertheless highlighted that higher uncertainty stemming from weaker economic growth and the Brexit issue is taking a toll on investment spending. The services survey will be release tomorrow.
GBPUSD has recovered from yesterday’s sub 1.4400 level a little this morning to trade at 1.4435. Brexit continues to loom with three weeks to polling day the FT poll of poll has 46% Stay, 43% Leave and the Undecided at a substantial 12%.
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