Markit manufacturing PMI from the UK (for March) is due on Tuesday 3 April 2018
Due at 0830GMT
(Note – non-manufacturing PMI due later in the week)
- We expect March Manufacturing PMI to stabilize following the decline in recent months
- Manufacturing PMI declined quite sharply after peaking at multiyear highs in November.
- Despite the recent weakness indicated by Euro area flash PMIs, global trade momentum remains buoyant.
- The survey was conducted from 12 to 26 March. Progress on the Brexit transition period was announced on 19 March, so the impact on corporate sentiment would depend on whether the majority of survey responses were taken prior to or after this date.
- We expect service sector confidence remain stable around the average seen in the past six months. Retail sector weakness may be offset by strength in professional services as Brexit preparations continue. The survey was conducted from 12 to 27 March. Progress on the Brexit transition period was announced on 19 March, so the impact on corporate sentiment would depend on whether the majority of survey responses were taken prior to or after this date.
- If the manufacturing number remains in expansionary zone, it’s unlikely to impact GBP much especially as services/construction sectors are more important components of the economy.
- The recent Brexit newsflow has become more positive and with the BoE set to hike in May, the bullish case for GBP continues to build.
- There were indications that growth in the construction sector is increasingly subdued – in our view, there’s scope for a downward surprise in this print.
- The services numbers have been in an expansionary zone and will have minimal impact if it continues to be so.