DAVY VIEW

Yesterday’s (October 3rd) PMI and ISM surveys bolstered fears the global manufacturing slowdown is spreading into domestic demand in many countries. Equity markets rose as investors priced in another 50bps of Fed rate cuts by end-2019. The UK Services PMI fell to 49.5, the first economy to see its services sector contract, with Brexit also blamed for companies putting off orders and employment cut at its fastest pace since 2009. The German Services PMI (51.4) and the US ISM non-manufacturing survey (52.6) also fell back sharply, with US/Chinese trade tensions also highlighted.