UK Services PMI Disappoints; Onto ADP & ISM Services

German and EZ services PMI revised higher; EZ retail sales decline; UK services PMI weaker. Focus turns to ADP, ISM services, factory orders and RBNZ rate decision.

The greenback is mixed in the ongoing session. It is weaker against NZD and JPY, stronger against EUR, CHF and CAD and unchanged against AUD and GBP. European equities are gaining around 0.2%

European data was mixed today. German services PMI was revised substantially higher to 49.7 from the initial estimate 48.0 and Eurozone services PMI was revised to 46.7 from 45.7. However, Eurozone October retail sales declined 1.2% from prior -0.6%. EURUSD trades near session lows around 1.3080.

The service sector in the UK expanded but less than analysts anticipated. The PMI index declined in November to 50.2 from previous 50.6 which is the slowest growth in 23 months. New business volumes declined for the first time in nearly two years and the level of confidence fell to 11 month low. GBP traders also await the Autumn forecast statement at 7:30 am ET. GBPUSD is little changed around 1.6110 and EUR/GBP fell to 0.8116.

Spain sold EUR 4.25 bln worth of 2015, 2019 and 2022 bonds vs. EUR 3.5-4.5 bln target. Average yields declined. Nevertheless, Spanish 10 year yield rose to 5.375%.

The US session kicks off at 8:30 am ET with the ADP employment report that is expected to fall to 129K in November from previous 158K. ISM non manufacturing at 10:00 am is seen slightly lower at 53.6 from 54.2 but the decline could be larger because of hurricane Sandy. Factory orders are anticipated flat in October after growing 4.8% during the prior month.

NZD traders await the RBNZ rate decision and a statement that is due at 3:00 pm. Most market participants see rates unchanged at 2.5%.

Patrik Urban