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GBP/USD Daily Forecast – 05 June

Sunday, Jun 04 2017
GBP/USD Daily Forecast – 05 June

Friday's session brought UK Construction PMI figures. The seasonally adjusted IHS Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI® ) posted 56.0 in May, up sharply from 53.1 in April, to signal the strongest expansion of overall business activity for 17 months. While the headline index signalled robust growth momentum during May, the latest reading was still much weaker than the post-crisis peak seen in January 2014 (64.6).

Focus of the US session was on NFP figures. The US unemployment rate unexpectedly fell to 4.3%, a new multi-year low, but it is a misleading optic for what is a disappointing report.  It is likely not weak enough to put much doubt into expectations for a Fed hike later this month, but it will reinforce the caution in the Beige Book and in recent comments from some Fed officials. Besides the decline in the unemployment rate, and a further decline in the under-employment rate (U-6) from 8.6% to 8.4%, there is little positive in today's report.  Non-farm payroll growth fell to 138k, nearly 50k below median expectations, which like our own, had been bolstered by the weekly jobs claims, withholding tax, and the ISM. 

From the UK, on Monday, Services PMI data is scheduled for a releases. Decline to 55.1 is anticipated. In the US session ISM Non-Manufacturing PMI figures will be published. Analysts predict no significant change.

 

Figures to watch:

 

Services PMI (Monday 10:30)

ISM Non-Manufacturing PMI (Monday 16:00)

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