Good morning,
Traders in the US return to their desk on Tuesday following the long bank holiday weekend, but it may be another 24 hours before things really start to pick up in the markets, with the second half of the week offering a whole lot more for in terms of major economic events.
The start of the week was understandably slow, given the significant drop in participation that can usually be associated with a US bank holiday. While this should certainly improve today, there still isn’t a huge amount to look at that is likely to cause much of a stir in the markets, especially in a week that offers rate decisions from the Bank of England and the ECB on Thursday, and the US jobs report on Friday.
During these weeks, traders tend to tread with a little more caution because the kind of moves that we can expect later in the week make people a little more nervous. What may add to this restraint is the fact that US indices are currently trading around record levels, which in itself has had a tendency to suck some of the bullishness out of traders as of late.
That’s not to say we won’t see any action in the markets as there’s still some important data being released. Already this morning, we’ve seen some good figures from both the UK and Spain, which appears to have provided a small boost to the markets. The UK construction PMI rose to an seven month high of 64 in August, while Spanish unemployment rose by far less than expected, which I guess is a small win, even though the employment situation in the country is still dreadful.
We’ll get some more insight into the US manufacturing sector today, with the final official manufacturing PMI and the ISM PMI being released. These numbers have been very impressive recently and have given plenty of reason for optimism, with the preliminary reading of the official PMI hitting an all-time high and the ISM number coming very close. Should we see this again today, it would be further evidence the US economy is recovering very well.
Ahead of the open, the S&P is seen 4 points higher, the Dow 34 points higher and the Nasdaq 12 points higher.
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