Britain’s Construction PMI Climbs
In line with yesterday’s upbeat manufacturing PMI reading in the UK, today’s report has shown that construction PMI in the nation improved unexpectedly for February. Going forward, tomorrow’s services PMI data will be noted to gauge the overall performance of Britain’s private sector activity, especially considering the dominant role of the services sector in the nation’s economy.
Across the Atlantic, yesterday’s ISM print showed that manufacturing activity in the US expanded at a slower pace than anticipated for February and continued on its decelerating trend for a fourth straight month. In the Euro zone, after yesterday’s better than expected preliminary consumer price inflation reading, today’s upbeat German retail sales numbers have temporarily eased concerns about the region’s economy.
Pound Sterling – UK Markets
Data just out has shown that construction PMI in the UK improved unexpectedly for February and nudged above the 60 mark. With activity in the construction sector showing no signs of slowdown, concerns among investors following the mixed housing market surveys in the UK are likely to take a back seat. The Pound-Dollar has shown little reaction to today’s data and has continued to trade in a tight range this morning. Moving ahead, tomorrow’s services PMI reading in the UK will attract considerable attention among investors, particularly considering the dominant role of this sector in Britain’s economy.
Yesterday, the Pound traded on a weaker footing against the majors amid mixed economic data in the UK. The Markit report showed that the pace of manufacturing activity in the UK improved more than expected for February, especially with new business growth remaining robust amid strong domestic demand. Another print revealed that demand for credit among consumers and mortgages approved by UK banks grew at a slower than anticipated pace for January.
US Dollar – US Markets
The greenback was range bound against its major peers in yesterday’s trading session, following the release of downbeat macro data in the US. Consumer spending in the nation at the start of the year, for January, was dismal and lower than market expectations, despite falling gasoline prices. Data suggests that households may be cutting back on purchases and saving more. Personal income for January grew in line with the previous month, albeit slower than expected, indicating steady wage gains in the US job market. Meanwhile, the ISM manufacturing activity reading for February dropped to the lowest since January 2014, caused by a slowdown in factory activity due to labour disputes at West Coast ports. Additionally, construction spending declined sharply for January reflecting signs of moderating pace of economic growth early in the first quarter.
The US Dollar is trading lower against most of its key peers this morning. Moving ahead, investors will keenly eye the ISM non-manufacturing PMI for February and the ADP employment data scheduled on Wednesday for fresh cues to gauge the pace of economic growth in the US.
Euro – European Markets
The Euro is trading below the 1.12 mark against the greenback this morning. On the economic front, German retail sales increased for January, growing at the fastest annual pace in seven years. Moving ahead, investors will keep a tab on today’s PPI figures from the Euro zone scheduled in a few hours for further direction.
The single currency reversed its earlier session gains and traded almost flat against the majors in yesterday’s trading session. The Euro area flash CPI print for February revealed a slowdown in the pace of deflation, though inflation continued to remain in the negative territory for the third consecutive month. It remains to be seen if the ECB’s asset purchase programme, which commences this month, aids in lifting prices during the course of the year. The Euro zone’s manufacturing sector activity expanded in the previous month, albeit slightly lower than expected, while the unemployment rate in the region unexpectedly dropped for January.
Other Currencies – Highlights
The Australian Dollar climbed against the greenback this morning after the Reserve Bank of Australia (RBA) decided to keep its interest rate steady in the monetary policy meeting held today. Last month, the RBA had cut its cash rate by 25 basis points and market participants were anticipating another rate cut today after last week’s economic data showed a more than expected decline in private capital expenditure for the last quarter of the previous year.
The RBA governor, Glenn Stevens, has hinted at reducing the borrowing costs again in the coming months. He further mentioned that growth in the nation’s economy has been projecting a downward trend, with domestic demand being weak. Going forward, market participants will keenly eye the nation’s GDP growth for the fourth quarter tomorrow which is anticipated to show a slowdown. Earlier today, Australia’s fourth quarter current account deficit narrowed more than expected.