UK: Exceptionally strong manufacturing PMI surprised markets - BBH

Analysts at BBH suggest that the UK surprised with an exceptionally strong manufacturing PMI as it rose to 57.3 from 54.2 and is the highest in three years.  

Key Quotes

“Most expected a slightly softer report.  Forward-looking new orders rose to 60.7 from 56.1, which is its best showing since January 2014.  The BOE meets next week, and it will likely put more emphasis on the services reading.  Last week, the UK reported Q1 GDP of 0.3%, which disappointed.”

“Sterling recovered from a three-day low near $1.2865 on the news but barely poked through $1.29.  Resistance in the $1.3000-$1.3055 area is expected to be formidable and is spurring some caution.  Here too the technicals are getting stretched, but a marginal new high cannot be ruled out.  The euro is recovering from a test of GBP0.8400 at the end of last week and yesterday.  It appeared to find offers as its approached GBP0.8500 and a downtrend line drawn from the end of March high.”