It was all swings and roundabouts for US investors yesterday as they struggled to keep up with a string of mixed economic data. The US dollar ended Wednesday’s session 0.6% down on the pound and 0.5% down on the euro.
US factory orders increased by 1.2% from the previous month to $586.1 million in August, exceeding market expectations of a 0.2% rise and after a 2.1% decline in July.
Private companies in the US hired 89,000 workers in September, below forecasts of a 153,000 increase and marking the lowest monthly increase since January 2021. Jobs were created in leisure/hospitality, construction, and financial activities but employment decreased in business services, trade/transportation, and manufacturing.
The Eurozone services PMI was confirmed at 48.7, while the composite printed at 47.2. The producer price index (PPI) was up 0.6% in August, meeting the market’s forecast. These data points seem to have fuelled the euro’s climb.
The UK services sector contracted less than expected yesterday, falling to 49.3 in September from 49.5 in August. This came as business activity and new work continued to decline.
The report revealed that UK business sentiment remained resilient, new work decreased fractionally, and inflationary pressures are at the lowest they’ve been for almost two-and-a-half years. Find the composite results below.
At the Tory party conference yesterday, prime minister Rishi Sunak formally announced that the Manchester leg of the HS2 rail link from Birmingham to Manchester has been cancelled. Attempting to spin a positive, the PM said the project had overrun in costs, so it no longer made economic sense.
This morning data revealed the trade surplus in Germany increased to €16.6 billion in August 2023 from €15.9 bn in July. Exports declined by 1.2% and imports unexpectedly dropped 0.4%.
Today economists will be digesting construction PMI results for the UK, Euro area, France, Germany, Italy and India. This afternoon, the US trade deficit is forecast to shrink slightly to $58.3 billion from $65 billion in July.
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