FOREX: FX OPTION EXPIRY

An upward surprise to the manufacturing PMI but services and the composite output PMIs were broadly in line with expectations. Note that this is the first notable firms' survey since the election - so the increase in confidence could be partly explained by further political stability - but on the growth picture the UK seems to be still doing well, culminating in increased services employment. Note that on cost passthrough, some of the pressures from wages seem to be receding but on the manufacturing side there are increasing pressures from supply chain delays. Highlights from teh press release:

• "The sharpest upturn in new business for 15 months and a strengthening of business confidence after a dip in June"
• "Services activity growth accelerated slightly, while manufacturing output rose to the strongest degree since February 2022. The upturn encouraged firms to increase their staffing numbers at the quickest pace for 13 months, while future activity expectations came close to matching February’s two-year peak."
• "Average prices charged at private sector companies rose at the slowest rate in almost three-and-a-half years during July, though the pace remained steep due to elevated costs. While input cost inflation at services firms eased further amid softening wage pressures, manufacturing firms faced the strongest rise in costs in one-and-a-half years as global freight challenges linked to the Red Sea crisis drove transport bills higher."
• "That said, the rate of inflation was still above its long-run trend, as firms continued to pass on higher expenses to their customers."
• "Staffing numbers rose at a solid rate that was the fastest observed in just over a year. Recruitment at services firms was often linked to a greater uplift in demand, outweighing some mentions of redundancies and budget cuts. Notably, job numbers at manufacturing firms were stable in July, ending a 21-month sequence of decline."
• "Demand from overseas also improved, with firms indicating the fastest uplift in new export orders for 16 months. This was centred on the services sector, though the drop in manufacturing exports was the joint-weakest in two-and-a-half years."