The headline release on Friday was October’s non-farm payrolls from the US. They increased by a whopping 250,000 following a downwardly revised 118,000 in September and far better than the 190,000 the markets had been expecting. Donald Trump was quick to Tweet about the numbers and used the social media platform to urge Americans to vote Republican in the midterm elections.
We also learned that wages in America grew at their fastest rate in almost a decade in September, with wages 3.1% higher than they were the same month a year ago. It is the first time since April 2009 that wage growth has been above 3% and is further evidence that the US economy is performing exceptionally well at present. The readings could not have come at a better time for the Republican Party, which will no doubt use them to try and keep a hold of both houses of Congress.
Unsurprisingly, the dollar strengthened against the sterling and euro, as the pound’s decent run came to an abrupt end. Hopes that a Brexit deal can be completed soon remain high, but it wasn’t enough to help the pound rally for a third straight day. In the UK, the construction purchasing managers’ index came in better than expected in October, at 53.3 from 52.1 the month before. Analysts had predicted a reading of 52.0.
In Germany and the eurozone, manufacturing PMI came in at 52.2 and 52 respectively which were both 0.1 below what had been expected. Unemployment in the US remained unchanged at a 49-year low of 3.7% to cap a fine end to the week for America. Following the releases, ING said that as well as the rate hike in December 2019, the Federal Reserve will hike rates three more times in 2019.
Today kicks off with new car sales and services PMI from the UK. We will also see the composite, services and non-manufacturing PMI from America. The headline release for this week is the UK GDP growth rate for the third quarter of 2018. It is expected that the UK economy grew by 1.5% last quarter from 1.2% in the third quarter, so it will be interesting to see what the actual figure is.
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