SPAIN DATA: Sep Services PMI: Positive Domestic Demand Signals
In contrast to Wednesday’s weaker-than-expected September manufacturing PMI, the services PMI beat expectations. Services printed at 54.3 (vs 53.3 cons, 53.2 prior). This helped the composite reading beat expectations at 53.8 (vs 53.3 cons, 53.7 prior). There were positive signals for domestic demand in the services print, with an uptick in new orders coming despite reports of soft tourism demand (which could be a seasonal dynamic).
Key notes from the release:
- “Supporting the rise in activity was another month of new business gains”….” Service providers pointed to positive demand conditions and success in securing new customers. However, latest data implied that growth was primarily led by domestic sources”
- “Firms are hopeful that demand will continue to strengthen, and many signalled plans to expand both service ranges and commercial activities in the year ahead.”
- “A positive outlook also underpinned another solid rise in staffing levels during September. Employment growth has now been sustained on a consecutive monthly basis for three years”
- “Staffing costs were reported as a key driver of higher overall operating expenses in September”….” Service providers responded to the increase in input costs by raising their own selling prices”…” However, amid reports of competitive market pressures, the degree to which selling prices rose was the weakest in four months”
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GILTS: Still Under Pressure
A negative open for gilts despite the recovery from worst levels in Bunds, as weakness in T-notes weighs.
- Futures break yesterday’s low (89.60). Fibonacci support is nearby (89.46), with bears remaining in technical control.
- Yields 2-3bp higher across the curve, steepening theme intact.
- 10s closed at 4.80% yesterday, seeing the first print above that level since late March. January highs (4.921%) present the next upside target there.
- 30s trade through yesterday’s fresh multi-decade high.
- That comes as ongoing fiscal worry, some questions surrounding the future of Chancellor Reeves and the potential Budget date (26 November touted) dominate locally.
- Final UK services PMI data is due today.
- Elsewhere, BoE’s Bailey, Lombardelli, Taylor & Greene will appear in front of the Treasury Select Committee. We will provide a little more on that in due course.
- Note that BoE’s Breeden will speak this morning, although the setting of the address (a “money & payments” conference) may limit scope for comments on monetary policy.
SILVER TECHS: Holding On To Its Latest Gains
- Holding On To Its Latest GainsRES 4: $40.323 - 2.000 proj of the Apr 7 - 25 - May 15 swing
- RES 3: $42.000 - Round number resistance
- RES 2: $41.064 - 1.764 proj of the Apr 7 - 25 - May 15 swing
- RES 1: $40.977 - Intraday high
- PRICE: $40.817 @ 08:16 BST Sep 3
- SUP 1: $38.804 - 20-day EMA
- SUP 2: $37.787 - 50-day EMA
- SUP 3: $36.216 - Low Jul 31 and a key support
- SUP 4: $35.285 - Low Jun 24
Trend signals in Silver remain bullish and the metal has traded sharply higher this week. Resistance at $35.930, the Jul 23 high, has been cleared. This confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Moving average studies are in a bull-mode position, reinforcing current trend conditions. Sights are on $41.064 next, a Fibonacci projection. Initial support to watch is $38.804, the 20-day EMA.
MNI: SPAIN AUG SERV PMI 53.2 (54.5 FCAST, 55.1 JUL)
- MNI: SPAIN AUG SERV PMI 53.2 (54.5 FCAST, 55.1 JUL)
