DailyFX European Market Wrap: British Pound Hit after Construction PMI Data
In Europe, the markets today are suffering from thin volumes with the US out for the Independence Day celebrations. Thus far, indices are drifting after a solid start to the third quarter.
Bucking the trend in London are two stocks; FTSE 100 constituent WorldPay, the payments company, up on takeover talk and and supermarket giant Sainsbury’s up on a bullish trading statement.
Elsewhere, French power provider EDF is down as it’s expected to have to take a hit from its involvement in the UK’s new nuclear plant at Hinckley Point, which may cost a lot more than originally thought.
In the FX markets sterling has taken a hit after poor UK construction PMI data showed that Growth in Britain's construction industry slowed in June, adding to signs that the UK economy might be struggling to regain much momentum after a lacklustre start to the year.
And, more broadly the dollar is up after the US treasury yield curve saw 2 year rates rise to levels not seen in several years.
Jeremy also looks ahead to the Agenda for Wednesday, July 5. He says that because the US markets are back so volumes should pick up again as we begin to start looking towards Friday's non-farm payrolls.
There are a number of service PMI reports to be delivered; China, the Eurozone, including Germany and France and then also the UK.
Later today we'll be watching the dollar trade following the release of the US FOMC minutes of the last rate meeting at which the Fed raised rates by a quarter point.
--- Written by Jeremy Naylor, DailyFX