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UK: PMI, FSI and stress test were the triggers for GBP - TDS

FXStreet (Delhi) – Research Team at TDS, notes that the FPC issued their semi-annual Financial Stability Report this morning, as well as the annual bank stress test results.

Key Quotes

“There was no change to the countercyclical capital buffer (CCyB), but the FPC did signal that it could soon start rising from 0% to 1%. Governor Carney stressed during the press conference that any increase in the CCyB would be about mitigating tail risks in the economy, and not a substitute for monetary policy. All seven banks passed the stress test, but not without two banks needing to boost their capital in order to do so.”

“The UK manufacturing PMI was also out, showing a much weaker decline than expected, falling to 52.7 in November from 55.2 in the prior month. A pullback in output growth in the intermediate goods sector was particularly severe (though it still remained in expansion territory), while a decline in purchasing prices also weighed on the headline. Employment and export orders did not deteriorate on the month, suggesting that the more important activity-related measures weren’t as bad as the headline suggests.”

UK PMI dropped to 52.7 in November from October’s 16 month high

The latest reading of the UK's PMI showed that the country’s manufacturing sector is growing at a slower pace than before. The Markit/CIPS manufacturing PMI is reported to have dropped to 52.7 in November from a 16-month high recorded in October. In October the PMI had stood at 55.2. The UK PMI for November registered is lower than the 53.6 expected. Exports have however not let down, recording the fastest growth in orders since August 2014.
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AUD & NZD rebound to be short-lived due to China headwinds and Fed tightening - BNPP

Economists at BNP Paribas, view that the prospects for AUDUSD and NZDUSD remain firmly bearish as China’s PMI data overnight highlights the ongoing headwinds (manufacturing PMI fell to 49.6) and due to higher US yields boosting the USD vs the commodity currencies.
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