There has been a raft of publications from Markit Economics in this morning’s trading session, after the Chinese non manufacturing PMI was printed early in the overnight/early morning session coming in at a bullish 55.4.
The European services PMI print came in at 52.2, edging up by a percentage point, whilst Spain’s fell to 49 and Italy’s beat expectations of 49.3 to rise to 52.7. The gauge of services activity for the UK printed at 60.3 in September, down from the month earlier by a decimal point and the highest level since December 2006, according to today’s report from Markit and the Chartered Institute of Purchasing and Supply.
Markit Economics opinion on the European PMI;
[quote]”The September PMI surveys provided further evidence that the eurozone recovery gathered pace, after the region pulled out of the longest recession in its history. There were also reassuring signals on the jobs front as the rate of losses eased to a very modest pace, raising the possibility of employment starting to recover in the near future. The final Markit Eurozone PMI® Composite Output Index rose to a 27-month high of 52.2 in September, up from 51.5 in August and above the earlier flash estimate of 52.1. The level of the headline index has improved in each month since March.”[/quote]
The U.S. dollar slumped to an eight month low on Thursday as the U.S.A. government shutdown drags on with no end in sight. Equity markets rose due to expectations major central banks might now have to indulge in their monetary easing policies for longer. President Barack Obama invited lawmakers to a White House meeting on Wednesday as the government shutdown, caused by a congressional impasse over funding, enters it’s third day.
While the ECB reiterated its forward guidance policy; promising to keep rates at or below current levels for an extended period, the council remains divided for the second month in a row over whether it should cut further.
Annual house price inflation in the UK has increased. The Halifax found prices in the three months to September were 6.2% higher compared with a year earlier. Prices rose by 0.3% in September compared with the month before, taking the average house price to £170,733.
Market snapshot at 9:30 am UK time
The Nikkei was flat in the overnight early morning session whilst the Hang Seng was up 1.00% on the day and the CSI up 0.59% on the day. The ASX 200 closed up 0.37%. European equity markets are mainly positive on the day, the STOXX index is up 0.05%, the FTSE up 0.30%, the CAC down 0.13%, with the DAX up marginally at 0.05%. The MIB has continued its ‘vote of confidence in the Italian government’ rally, up 0.48%.
Commodities have failed to continue their rise of yesterday; ICE WTI oil is down 0.54% at $103.54 per barrel, with NYMEX natural up 0.25% at $3.55 per therm. COMEX gold is down 0.88% at $1309.10 per ounce with silver down 1.40% at $21.59 per ounce.
Looking towards the USA open the equity index future for the DJIA is down by 0.17%, the SPX is down 0.18% and the NASDAQ flat.
Forex focus
The dollar has declined by 0.2 percent percent to $1.3607 per euro early in the London session after reaching $1.3623, the weakest since Feb 4th. The greenback advanced by 0.3 percent to 97.68 yen after dropping 0.9 percent over the past two days. Japan’s currency retreated 0.5 percent to 132.92 per euro.
Sterling fell 0.2 percent to 83.86 pence per euro early in the London session after appreciating to 83.33 pence on Oct 1st, the strongest since Jan 17th. The pound was little changed at $1.6211. It reached $1.6260 on Oct 1st, the strongest level since Jan 3rd.
High impact news events this afternoon
The unemployment insurance claims from the USA are due to be printed, with the expectations that the number will come in at 315K, although they’re unreliable given the partial USA govt shutdown and the lack of data from certain states. The ISM non manufacturing PMI is published with expectations of a reading of 57.2
