As geopolitical tensions between the East and West rise, sanctions and souring relations could have lasting impacts on business globally.
- Uptick in service sector growth may bolster GBP
- Eurozone retail sales expected to rally
- US service PMI forecast to show robust growth
The UK will publish its latest update on its all-important service sector later this morning, with GBP investors hopeful that it will help to push the pound higher.
Economists forecast the latest Services PMI release will see the index tick up from a 16-month low of 53 to 53.3 in February.
However the index will likely need to push a little higher than this if Sterling is to make any gains today, with a reading of 53.3 likely to prompt further concerns about the UK’s first quarter growth.
With the UK’s service sector accounting for around 80% of the UK’s economic growth analysts expect any lacklustre reading to do little to allay fears that GDP may slow to a feeble 0.2% at the start of 2018.
EUR likely to strengthen as retail sales rebound
The euro may trend higher this morning as analysts remain confident that Eurozone retail sales will have rebounded at the start of the year.
Current forecasts suggest that Eurostat will report that retail sales grew 0.3% in January after dipping -1.1% in December.
However with last week’s data showing Germany’s retail sales declined for the second consecutive month in January, there are fears that the current estimate may be too optimistic.
Robust PMI may bolster USD
The US will release its own services PMI this afternoon, with the US dollar expected to rise despite a slight dip in activity.
ISM’s non-manufacturing PMI is expected to have slipped to 59 in February as the sector cools after striking a 13-month high of 59.9 at the start of the year.
While this suggests that activity will have slowed last month, it will still be the fourth highest reading of the last decade.
However some of the more optimistic investors are likely to hold out hope that the service sector may have expanded at an even faster pace last month given the strong expansion seen in last week’s manufacturing PMI.
Monday, 5 March, 2018
09:30 GBP Services PMI
10:00 EUR Retail Sales
15:00 USD Services PMI
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)