Spreadex Market Update
UK construction PMI beats expectations but fails to match explosive manufacturing recovery; US non-farm still to come
Coming in at 49.2 against the 46.6 forecast and the 45.9 expected, the PMI wasn’t quite as explosive as the manufacturing recovery yesterday, but still pointed to a less perilous post-Brexit situation than was forecast. Interestingly the good news, which has recently boosted the pound and not the FTSE, was firmly absorbed by the UK index, which rose over 50 points to once again graze 6800. Sterling, on the other hand, couldn’t gain the kind of traction it found following the manufacturing survey, sitting flat against the dollar and 0.1-0.2% higher against the euro.
While the FTSE mused over construction the Eurozone indices continued to benefit from the relatively weakened euro. The DAX rose by 0.3% to cross 10550 once again, while the CAC took the mantle of the morning’s best performer with an impressive 1.1% increase.
Turning to the real meat of the day and the Dow Jones futures are classically flat ahead of the all-important non-farm jobs report. Analysts are expecting the reading to come in at 180k compared to the stellar 255k seen last month; that would be a decent figure, but one that wouldn’t give investors too much clarity in terms of whether or not the Fed will raise rates in September. Beyond the headline number wage growth is forecast to drop to 0.2% from 0.3% in July, while the unemployment rate could well fall back to 4.8%.
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