Britain’s construction activity reading today indicated that the sector performed stronger than market consensus for June, indicating that the economy is on a largely firmer footing compared to the first quarter. Following the recent weakness in manufacturing and an improvement in today’s construction PMI reading, investors will now look forward to the services sector reading scheduled tomorrow to gauge the overall health of the economy in the second quarter.Across the Atlantic, today’s non-farm payrolls report will be important and any positive surprises in the data could raise hopes of a sooner-than-expected rise in interest rates by the Federal Reserve. In Europe, the ongoing crisis in Greece will continue to dominate headlines.
The just released survey data indicated that the expansion in Britain’s manufacturing activity was lower than market consensus for June, with the PMI dropping from May’s level, hurt by a combination of strength in domestic currency and weak business investment. Across the Atlantic, the June ISM manufacturing report later today is keenly anticipated to gauge the level of activity in the nation’s industrial sector. Also in focus will be ADP employment data.In Europe, the final PMI numbers confirmed that Euro zone factory growth picked up slightly in June, in line with expectations. Meanwhile, Greece has become the first advanced nation to miss an IMF payment, but hopes of a new deal have resurfaced after Euro group officials agreed to discussions for a new bailout programme.
The just out revised reading of UK GDP showed that the economy expanded at a faster pace than previously estimated for the first quarter, alongside expansion in business output and higher consumption levels. The upward revision is likely to bring forward expectations of an interest rate rise should fundamentals continue to improve in the coming months.Going forward, the flash estimate of consumer price inflation in the Euro zone and the Conference Board’s update on US consumer confidence will be in focus today. However, most market attention remains focused on Greece as the cash-strapped nation looks set to default on its debt payment to the IMF.