UK: Market focus on PMI data - SocGen

Kit Juckes, Research Analyst at Societe Generale, suggests that the most closely watched PMI may be the one in the UK, which fell from 52.2 to 48.2 in July as a reaction to the EU referendum result.

Key Quotes

“The only surprising feature of Brian Hilliard’s forecast of a bounce to 50.5, is that it’s the highest forecast in the Bloomberg survey. A 50% retracement of a sharp drop seems reasonable and would tell me absolutely nothing new about the UK economy or the impact of leaving the EU on it. I like medium-term shorts in GBP/USD and if we get a big enough fall in EUR/GBP today I think that would be worth buying. Just for today though, if your horizon is short enough, buying GBP looks like a decent risk-reward bet.”