From the UK yesterday it was something of a disappointment seen when construction PMI data came in below expectationsat 55.3 instead of the 58.4 anticipated. This is the worst we’ve seen it since 2013 as commercial development builds overtook residential builds. GBP took a knock in strength against USD following this, but this was also attributed to dollar strengthening. There has also been concern shown following the UK’s decision yesterday to begin military operations in Syria.
In terms of data today, we’ll see services PMI out this morning which will have an effect on GBP strength if a weakening is seen.
Mixed fortunes were had by the euro as it lost out against the dollar but gained against pound –although, by the end of the day EUR had clawed back some losses the day up and flat against USD. In terms of data out, we saw a big improvement in Spanish unemployment levels (down by 17k).
In terms of data today, there will be 8 data releases of importance, one of which is the minimum bid rate, which is chased with an ECB presser. What pundits are going to be looking for are policy announcements from the ECB and what effect those might have in redressing economic issues.
Employment data (ADP) was also good in the States yesterday, coming in at a better 217,000. We also saw Janet Yellen give a speech last night in which she said that if the US does not hike rates this later this month then we could see the US in a state of catching up to competitors. This might lead to more ‘tightening’ down the road, she said, that could then lead to a possible recession. At this point though, it’s widely (66%) held that the rate will be raised in the next couple of weeks.
There may be some more excitement from Yellen today as we’ll see her speak this afternoon in front of the Joint Economic Committee. What will she have to say?
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