Информационно-аналитический отдел TeleTrade

UK service providers indicated the fastest expansion of business activity for eight months in June, which continued the recovery in growth seen since March's snow-related disruption. The latest upturn in service sector output was supported by the strongest increase in new work since May 2017.

The seasonally adjusted IHS Markit/CIPS UK Services PMI Business Activity Index posted 55.1 in June, up from 54.0 in May, to remain above the 50.0 no-change mark for the twenty-third consecutive month. Moreover, the latest reading signalled the strongest rate of expansion since October 2017. Survey respondents commented on a general upturn in client demand, particularly for business and financial services. There were also reports that unusually favourable weather conditions had boosted consumer spending.

The eurozone economy regained some traction at the end of the second quarter. Rates of expansion in output and new business accelerated, although failed to fully recover the momentum lost earlier in the year. The main impetus was provided by the services economy, which saw growth accelerate to a four-month high, offsetting a further waning in the pace of increase in manufacturing production.

The final IHS Markit Eurozone PMI Composite Output Index posted 54.9 in June, up from 54.1 in May and the earlier flash estimate of 54.8. However, the average reading over the second quarter as a whole (54.7) was the weakest registered since the final quarter of 2016.

The seasonally adjusted final IHS Markit Germany Services PMI Business Activity Index registered 54.5 in June. This represented a notable rebound from a 20-month low of 52.1 in May, when business activity had been affected by the timing of public holidays, and also an improvement on the 'flash' estimate (53.9). The latest reading signalled the strongest rate of growth since February, but one that was still well below the highs seen at the start of the year.

The headline seasonally adjusted IHS Markit France Services Business Activity Index registered 55.9 in June, up from May's 16-month low of 54.3. However, the latest reading signalled that business activity growth remained slower than seen on average in 2017. Some survey respondents noted that softer business investment among clients had acted as a headwind to growth.

Trevor Balchin, Economics Director at IHS Markit which compiles the France Services PMI® survey, said: "French private sector expansion picked up in June, driven by a rebound in the services sector that more than offset a further slowdown in manufacturing output growth. Services activity has now outpaced goods production for the fifth month in a row".

The Spanish service sector remained well inside growth territory during June, despite rates of expansion in activity and new business easing slightly from May. Employment continued to rise at one of the fastest rates in the past 11 years.

Meanwhile, the rate of input cost inflation accelerated to the steepest in almost a decade on the back of higher costs for fuel and staff. Output prices also increased, albeit modestly.

The headline seasonally adjusted Business Activity Index posted 55.4 in June, down slightly from 56.4 in May but still pointing to a marked monthly increase in service sector business activity.

Australian retail turnover rose 0.4 per cent in May 2018, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures.

This follows a 0.5 per cent rise in April 2018.

"Department stores (3.9 per cent) led the rises," said Ben James, Director of Quarterly Economy Wide Surveys. "There was also a strong result in clothing, footwear and personal accessories, which rose 2.2 per cent. Both industries were able to rebound after unusually warm weather impacted April sales."

There were also rises in food (0.3 per cent) and household goods (0.1 per cent). Cafes, restaurants and takeaways led the falls (-1.0 per cent), whilst other retailing also fell (-0.1 per cent).

Latest Caixin China Composite PMI data (which covers both manufacturing and services) showed that Chinese business activity continued to expand at the end of the second quarter. Notably, the Composite Output Index rose from 52.3 to 53.0 in June, to signal a solid rate of growth that was the steepest recorded since February.

The improvement in the headline Composite Output Index was supported by stronger growth across both the manufacturing and service sectors. Services activity expanded at the quickest rate for four months in June, as highlighted by the seasonally adjusted Caixin China General Services Business Activity Index rising from 52.9 in May to 53.9.

In trend terms, the balance on goods and services was a surplus of $1,056m in May 2018, an increase of $83m on the surplus in April 2018.

In seasonally adjusted terms, the balance on goods and services was a surplus of $827m in May 2018, an increase of $355m on the surplus in April 2018.

In seasonally adjusted terms, goods and services credits rose $1,353m (4%) to $35,562m. Non-rural goods rose $938m (4%) and non-monetary gold rose $343m (22%). Rural goods fell $4m. Net exports of goods under merchanting remained steady at $4m. Services credits rose $75m (1%).

EUR/USD

Resistance levels (open interest**, contracts)

$1.1769 (3579)

$1.1743 (2016)

$1.1720 (1134)

Price at time of writing this review: $1.1668

Support levels (open interest**, contracts):

$1.1637 (2949)

$1.1594 (2621)

$1.1547 (4446)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date July, 9 is 101542 contracts (according to data from July, 3) with the maximum number of contracts with strike price $1,1550 (4446);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3356 (807)

$1.3313 (681)

$1.3276 (1002)

Price at time of writing this review: $1.3203

Support levels (open interest**, contracts):

$1.3160 (1802)

$1.3129 (1820)

$1.3089 (2282)

Comments:

- Overall open interest on the CALL options with the expiration date July, 9 is 25238 contracts, with the maximum number of contracts with strike price $1,3650 (2456);

- Overall open interest on the PUT options with the expiration date July, 9 is 33225 contracts, with the maximum number of contracts with strike price $1,3250 (2609);

- The ratio of PUT/CALL was 1.32 versus 1.31 from the previous trading day according to data from July, 3.

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.