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UK PMI: Continued near-term headwinds - Lloyds

According to analysts from Lloyds, today’s PMI numbers in the United Kingdom contribute to the impression that the slowdown in growth in becoming increasingly clear.

Key Quotes:

“The UK services PMI fell back in April after its recovery in March, dipping to 52.3 from 53.7, much weaker than expected (CON: 53.5). April’s headline PMI is a 38-month low, well below the long-term average of 55.2.”

“Following the marked weakness seen in both the manufacturing and construction PMIs earlier this week, downside risks to the key services sector PMI seemed like a heightened possibility, with the earlier reports pointing to increased economic uncertainty – global and domestic – as weighing on sentiment.”

“Overall, the impression that growth in the dominant and domestically facing sector of the economy has softened meaningfully since the end of 2015 is becoming increasingly clear, with the report details suggesting continued near-term headwinds to the remaining modest momentum.”

“With the services PMI historically having some predictive power for trailing changes in the MPC’s policy sentiment, today’s weaker reading is likely to reinforce MPC caution.”

USD/JPY: Downside risks, intervention expectations around 105 - MUFG

Analysts from The Bank of Tokyo-Mitsubishi UFJ see the USD/JPY pair with a bearish bias, likely to trade between 105.50 and 108.50 during the next week. They affirmed that Japanese authorities remain concern about the strengthening of the yen.
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