Pound Finds Early Support, while Mining Stocks Weigh on the FTSE100
It was a relatively quiet morning on the UK economic calendar. The UK’s finalized service and composite PMIs for March were in focus.
In March, the services PMI increased from 60.5 to 62.6, up from a prelim 61.0. Despite the manufacturing PMI falling to a 13-month low of 55.2, the composite PMI rose from 59.9 to 60.9 (prelim 59.7).
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According to the March survey,
- Removal of pandemic restrictions and the return to offices supported the services sector, which grew at the second-fastest pace since May-1997.
- Business sentiment towards the year ahead weakened due to Russia’s invasion of Ukraine.
- The rate of prices charged inflation was the steepest since the index began in July 1996.
- Staffing levels increased at the fastest pace since October 2021, with staff shortages leading to weaker supplier performance.
- Output prices, driven by higher salaries and prices for energy, fuel, and raw materials, rose at the second-fastest pace since records began.
Market Impact
Ahead of today’s stats, the Pound fell to a pre-stat and current-day low of $1.31060 before rising to a pre-stat and current-day high of $1.31447.
In response to today’s PMIs, the Pound rose to a post-stat high of $1.31922 before falling to a post-stat low of $1.31155.
At the time of writing, the Pound was up by 0.08% to $1.31231.
While the PMI numbers were Pound positive, it has been a bearish start for the FTSE100.
At the time of writing, the FTSE100 was down by 0.13% to 7,549.10.
Mining stocks weighed this morning, with Rio Tinto (-1.72%), Anglo American (-1.82%), and Glencore (-1.20%) hitting reverse.
Mining stocks struggled early on as the markets awaited news of fresh EU sanctions on Russia.