Global macro overview for 01/12/2017

In November, the UK PMI Manufacturing activity index jumped to 58.2 from 56.6 in October (after revision). This is a big surprise because the market carefully assumed an increase to 56.5 from 56.3 before the revision. You can see that a solid pace of recovery in Euroland also benefits companies in the UK. Manufacturing production expanded at the fastest pace since September 2016 and to one of the greatest extents during the past four years. Companies linked this to stronger inflows of new orders, reflecting solid domestic demand and steeper gains in new export business. Some companies noted higher sales to clients in Europe, the Americas, Asia and the Middle East. There were also reports that the historically weak sterling exchange rate continued to boost export competitiveness (although mentions of this were less prevalent than earlier in the year). The expansion remained broad-based by subsector. Strong and accelerated growth of production and new orders were registered across the consumer, intermediate and investment goods industries. Investment goods producers saw an especially marked increase in new orders, the sharpest seen since August 1994.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The GBP/USD pair stopped earlier declines and rebounded to 1.3513, although the pressure to take profits from increases in recent days is high. Currently, the pair is coming down from the level of 1.3521 (78% Fibo). The nearest technical support is seen at the level of 1.3456 - 1.3432.

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