The PMI data showed that the US manufacturing and services sectors contracted in August, suggesting that the economy may be slowing down.
The weaker data boosted risk assets, with US stocks and European stocks rising. The GBP weakened against the dollar and euro, as the weaker PMI data raised concerns about the UK economy.
Key Quotes
- “The miss in the PMI data occurred at a time that both the USD and yields were looking stretched in the short-term, so the timing was perfect for seeing downside in both assets.”
- “The move lower in the USD and yields providing fantastic opportunities for longs in assets like gold as well as the AUDUSD (which was also supported yesterday by a broad move higher in base metals).”
- “The GBP is the weakest of the majors following the very bleak UK PMI data released a bit early yesterday morning, which lowered interest rate expectations for the BoE.”
Looking Ahead
The main highlight on the data side for the rest of the day will be US jobless claims. Any weakness in the data could further boost risk assets and weigh on the dollar.
Traders will also be looking for any important comments coming out from Jackson Hole. The Federal Reserve‘s annual economic symposium is taking in Jackson Hole, Wyoming – any comments from Fed officials could move markets.
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