UK PMI decline could help ease inflation concerns

Posted by Joshua Mahony -
Scope Markets
  • Mixed trade in Europe after hawkish Fed minutes
  • UK services PMI decline could help ease inflation concerns
  • Nvidia beat estimates yet again, with the company valuation now topping $2.5 trillion

A mixed start in Europe has seen markets treading water, as concerns over potential future tightening from the Federal Reserve overshadow yet another impressive showing from Nvidia. While the market responded well to Powell’s tone at the meeting earlier this month, overnight minutes showed that a number of members viewed additional rate hikes as a distinct possibility given elevated inflation and “easy financial conditions”. All eyes turn to the US unemployment claims and PMI surveys later today, with any additional weakness helping to ease rate hike concerns given the raft of weaker economic data released since the FOMC meeting on 1 May.

UK PMI data saw an unexpected rebound in manufacturing, with the sector moving into expansion territory for the first time in almost two-years. Unfortunately, that strength flew in the face of a sharp pullback for UK services growth, driving the composite figure back down to 52.8. Yesterday’s inflation report highlighted curious trend where the entire inflation figure was being driven by the services sector (5.8%), while goods inflation came in at -0.8% for the year. With today’s report showing particular weakness for services sector input prices, bulls can take solace in the disinflationary impact of today’s PMI survey.

Nvidia promise to provide US markets with a welcome boost at the open, with the chip manufacturer set to gain over 6% thanks to yet another blockbuster earnings report after the close yesterday. Despite concerns around potential slowdown in the rapid pace of earnings growth set over the past year, the company once again managed to top the lofty expectations set by markets. This takes the company to an incredible $2.5 trillion market capitalization, topping the value of the entire German DAX. For many, this essentially draws a line under the first quarter earnings season, with 95% of the S&P 500 having now reported. Despite a strong earnings season having helped push the likes of the Dow up to record highs of 40k, this summer could be a difficult one if we are solely focused on the inflation and interest outlook.

Share this article:

Disclaimer: This material is a marketing communication and shall not in any case be construed as an investment advice, investment recommendation or presentation of an investment strategy. The marketing communication is prepared without taking into consideration the individual investors personal circumstances, investment experience or current financial situation. Any information contained therein in regardsto past performance or future forecasts does not constitute a reliable indicator of future performance, as circumstances may change over time. Scope Markets shall not accept any responsibility for any losses of investors due to the use and the content of the abovementioned information. Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.

Payment Methods

Scope Markets
Scope Markets
Scope Markets
Scope Markets

Awards

Scope Markets
Scope Markets
Scope Markets
Scope Markets

Scope Markets offers institutional and retail trading services to businesses and traders worldwide. Our top management team has more than 20 years of experience in the industry, and we are proud of the solid partnerships we built over the years. Whether it's a business or individual, Scope Markets has a wide range of trading solutions that are compliant, flexible, cost-efficient, innovative, and place the client first.

Contact Us

Registered address:
6160, Park Avenue, Buttonwood Bay, Lower Flat Office Space Front, Belize City, Belize

Email:
customerservice@scopemarkets.com

Tel:
+44 2030 516959

Risk Warning

Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors. Trading in financial instruments may result in losses as well as profits and your losses can be greater than your initial invested capital. Before undertaking any such transactions, you should ensure that you fully understand the risks involved and seek independent advice if necessary. Please read and ensure you fully understand our Risk Disclosure.

Legal Information

RS Global Ltd is authorized and regulated by the Financial Services Commission of Belize ("FSC") under the Securities Industry Act 2021 with registration number 000274/2.

Restricted Regions

Scope Markets does not offer its services to the residents of certain jurisdictions. Please read carefully our Restricted Countries document.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

© Copyright 2022 Scope Markets. All Rights Reserved.