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Weaker UK manufacturing PMI pulls pound back below 1.51 dollars

Posted on December 1, 2015 at 3:06 pm GMT

Manufacturing activity in the United Kingdom fell more than expected in November, reversing some of October’s sharp gains. The Markit/CIPS manufacturing PMI declined to 52.7 in November from October’s 16-month high of 55.2. The figure took markets by surprise as analysts were expecting a milder drop to 53.6. Sterling, which had been advancing against the dollar prior to the data, fell to 1.5078 dollars immediately after the release. It extended its losses to 1.5059 dollars in late European trading, pulling [..]

China manufacturing output still sluggish but growth in rest of economy gathers pace

Posted on December 1, 2015 at 11:06 am GMT

The latest official PMI data from China highlighted the growing divergence between manufacturing and non-manufacturing output as the economy struggles to regain momentum. Manufacturing PMI declined further into negative territory to 49.6 in November from 49.8 the prior month. Consensus estimates were for the reading to stay unchanged at 49.8. Non-manufacturing output rose however, climbing to 53.6 from October’s 53.1. A reading above 50 indicates expansion. The improving picture in the rest of the economy could be a sign that [..]

UK Q3 GDP unrevised as jump in imports drags down on growth

Posted on November 27, 2015 at 3:10 pm GMT

Second estimates of GDP growth in the United Kingdom did not deliver any surprises as the data was in line with expectations. Quarter-on-quarter growth was unrevised at 0.5%, while the year-on-year rate was also unchanged at 2.3%. However, the detailed analysis of GDP growth and its components shed some more light on the state of the UK economy, particularly, the growing deterioration of the UK’s trade situation. Exports grew by just 0.9% during the quarter as the stronger pound and [..]

Falling unemployment in Japan fails to spur spending and consumer prices

Posted on November 27, 2015 at 1:20 pm GMT

Data out today showed Japan’s labor market continued to strengthen as unemployment fell to a 20-year low in October. The unemployment rate dropped to 3.1% in October against expectations it would stay unchanged at 3.4%. However, in what could be a worrying trend, household spending declined month-on-month for the second month in-a-row. Household consumption was down by 2.4% y/y in October, sharply below estimates that it would rise by 0.1%. It follows a 0.4% drop the prior month. The Bank [..]

Week Ahead – ECB policy meeting and US nonfarm payrolls to take centre stage

Posted on November 27, 2015 at 9:13 am GMT

After weeks of signalling the possibility of extra stimulus in December, the European Central Bank (ECB) has raised market expectations of a major policy change next week in a bid to lift Eurozone inflation. Meanwhile, nonfarm payrolls numbers in the United States could be the last key data to seal the deal for a December rate hike. Before that though, Japanese industrial production figures for October should be interesting to watch on Monday. With signs of industrial output starting to [..]

US personal consumption slows in October but capital goods spending jumps

Posted on November 26, 2015 at 12:36 pm GMT

A batch of key indicators for the US economy out on Wednesday showed that consumers are saving more and spending less even as incomes rise. However, there are signs that the manufacturing sector could be coming out of the doldrums as spending on capital goods increased in October for the first time in three months. Personal income rose by 0.4% m/m in October, in line with consensus estimates and faster than September’s upwardly revised 0.2% gain. The increase was led [..]

US GDP revised higher in third quarter as Fed hike moves closer

Posted on November 24, 2015 at 4:21 pm GMT

US economic growth in the third quarter was revised higher today as the decline in inventory investment was less than initially estimated. GDP expanded at an annualised rate of 2.1% in the third quarter of the year, versus previous estimates of 1.5%. The revision was in line with forecasts and underscores the strength of the US economy at a time when the US Federal Reserve is looking to raise interest rates for the first time in nine years. The upward [..]

German business sentiment improves in November; Q3 GDP growth confirmed at 0.3%

Posted on November 24, 2015 at 11:00 am GMT

The German Ifo business survey showed sentiment rose in November among German businesses to the highest level since June 2014. The Ifo business climate index increased to 109.0 in November from 108.2 in October and against estimates it would stay unchanged. The current assessment index, which fell sharply last month as weakening overseas demand had dampened the mood, rose to 113.4 in November from an upwardly revised 112.7 the prior month. This was well above expectations that it would drop [..]

Dollar strength, China concerns push metals to multi-year lows as oil tests $40

Posted on November 23, 2015 at 3:54 pm GMT

The commodities rout continues to haunt metal prices such as copper, iron ore, nickel and zinc, which have all plummeted to multi-year lows in recent days. The strong dollar is one of the reasons commodity prices continue to come under pressure as the two have traditionally shared an inverse relationship (see graph). This is because the majority of commodities are priced in dollars so when the value of the dollar goes up, it will require fewer dollars to buy commodities. Another [..]

Eurozone PMI points to activity rebounding to 4½-year high

Posted on November 23, 2015 at 11:26 am GMT

The latest Markit flash PMI readings for the Euro area have shown a surprise uptick in Eurozone activity in November. The flash reading of the composite PMI, which measures all activity across the Eurozone, rose to a 4½-year high of 54.4 in November from 54.0 in October. The figure was higher than consensus estimates of 53.9. There was improvement in employment, new orders, and backlogs of work, which all rose to 54-month highs. The services sector performed more strongly than [..]

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