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Is UK Services PMI Suggesting a Change in Sentiment?

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Nov. 20 2020, Updated 5:03 p.m. ET

UK Services PMI in April

According to a report by Markit Economics, the final UK Services PMI (Purchasing Managers’ Index) improved in April compared to March. It was 52.8 in April and 51.7 in March. March’s figure was a 20-month low, and April’s figure didn’t meet the preliminary market expectation of 53.5.

The April Services PMI was mainly due to the following:

  • Production output and volume improved at a modest rate in April.
  • New orders and export orders improved at a marginally higher rate in April. Bad weather conditions and heavy snow disrupted business activity.
  • Job growth in the services sector improved at a modest rate in April.
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Index and ETF performances in April

The iShares MSCI United Kingdom ETF (EWU) rose 4.3% in April. The UK’s broader market FTSE 100 Index (UKX) improved 6.4%. Although the United Kingdom’s major indexes recovered some points in April, investor sentiment for economic improvement was still under pressure.

The United Kingdom’s central bank reduced the urgency of a rate hike since many of the economic indicators didn’t show good figures. Poor economic growth in the first quarter of 2018 further weakened investor confidence.

In the next part of this series, we’ll analyze the performance of the Japan Services PMI in April.

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