Published on 5 Jul 2017
Markets
in Europe are finding it difficult to establish any firm direction
ahead of the Fed minutes later on today, which come after the European
markets close, then there’s private payrolls in the US tomorrow with ADP
as a drum roll for Friday’s non-farm report.
PMI’s generally strong across Europe, with the so called Macron effect quoted as one of the reasons why there’s a growing confidence across the Eurozone. This refers to the recent election, in a landslide, for the new French president Emanuel macron who is generally being seen as a breath of fresh air to stale European politics.
Sterling has hit a one week low after the third poor PMI reading for the UK economy this week. Today it was the turn of the service sector. The gap between expectations and what came thorough was not as big as the manufacturing or the construction PMI’s earlier, but nonetheless at 53.3 on forecasts of 53.4, it was yet another piece of data that shows that the UK economy is struggling.
Despite this the threat of higher interest rates in the UK remains from the Bank of England.
One of those who voted recently for a UK rate rise immediately, Michael Saunders, has broken cover with a further statement telling consumers that they should prepare for higher interest rates at some point in the future.
The issue, he says, is inflation is rising too fast.
Critics of the rate rise point out that the inflation that is seen in the UK economy is mostly generated from weaker sterling which is beyond the bank of England’s control. There is no wage inflation to concern the central bank and growth is seen as slowing, as evidence again today with that latest run of PMI data. The bank will be more than well aware that if it does raise rates it could be risking what little growth there is at present and with the amount of consumer debt in the system any rise in interest payments will send many households further into the red.
The bank of England’s next pronouncement on rates is August 3rd
Following up on a report I covered yesterday on M&A in the UK, today London listed shares in payment processing company Worldpay spiked to another new record high on the back of a report that the payment processor's board is close to backing an 8.5bn pound deal with US credit card processing company Vantiv.
It follows the near 30 percent rise yesterday for Worldpay, after it confirmed it was in takeover talks with Vantiv and JP Morgan.
#news
@CVecchioFX
@DavidJSong
@MBForex
@JamieSaettele
@JohnKicklighter
@ilyaspivak
No comments:
Post a Comment