In today’s session, all eyes will be on whether the US employment report supports the case for the Fed to raise its interest rate this year, amid the recent rout in financial markets that has threatened to dent growth and depress inflation. The September payrolls report is anticipated to show that US employers added jobs at a robust pace, signalling that the nation’s labour market continues to strengthen.Data released just now which indicated that UK‘s construction sector experienced better than expected activity growth in September, was reassuring for the British economy. Meanwhile, the ECB Chief last night stated that the Euro area is returning to sustained growth aided by the central bank’s aggressive monetary policy.
The first session of the fourth quarter has commenced with the release of several manufacturing purchasing managers’ indices in the major economies. In the UK, the latest manufacturing PMI report showed that the sector remained weak, with activity expanding at the slowest pace in three months for September.In Europe, the PMI numbers revealed weakness in the manufacturing sector for Germany, Italy and Spain with only France showing a slight improvement in factory activity for September. The picture could be similar across the Atlantic, with the ISM and final Markit manufacturing PMI data in the US expected to post weak readings for the previous month.
The pace of notable economic releases has picked up today, starting with the just out data which showed that British mortgage lending recorded the largest increase since May 2008. The number of home loan approvals rose above expectations, adding to evidence that the UK housing market is strengthening. In the session ahead, a CBI survey will offer an early clue on UK retail spending for September which will be followed by the Conference Board’s measure of consumer confidence in the US.In Europe, German preliminary CPI print and Euro zone’s business sentiment data scheduled later today will attract significant market attention.