UK Services PMI made a surprise move to the downside today as the index shrank to 48 .9 from an expected 51 and previous 51.3. A score below 50 is indicative of a contraction. By contrast the EU zone beat its expected 52.7 with a 53.3. One number does not a trend make but it could portent a slow-down in the biggest part of the UK economy. This initially weighed on GBP but sterling rebounded and ended the day higher up almost 0.5% at $1.318 on renewed hopes of a Brexit deal . This was reflected further in the FTSE250’s rally of 1.4% as UK companies took cheer. Outperforming sectors were FS, Insurance, and Construction all up almost 2% while Banks, Services , T&L, Gen Retail were all up over 1%. Only the more defensive sectors ended in the red with Tobacco down almost 2.5%. Beverages -1.3%, Pharm -1.2% and utilities between -0.3 and -0.8.
Brent shed 0.7% while copper rallied 1.4%, iron ore 2.3% while gold and silver are flat on the day.
Market sentiment shows low expected volatility across the board with the CBOE VIX at 13, the VFTSE at 12 and the VSTOXX at 14 all down around 5%. The US Fear and Greed index has rallied back to 65 indicated greed and may be helped by improvements in US-China trade relations