There's been some selling seen in the Pound this morning with Sterling moving back below the 1.36 handle after earlier the market reached its highest level against the US Dollar since mid-September. The FTSE 100 is attempting to recover after a soft start to the year with the index trading little changed on the day.
UK construction PMI misses forecasts
For the second successive day there has been a worse than expected PMI reading released from the UK with the construction number this morning coming in below forecasts after Tuesday saw the manufacturing equivalent disappoint. The figure itself of 52.2 is fairly solid in being the second highest reading in the past 6 months, but against a prior reading of 53.1 and a consensus forecast for something around 52.8 it is a mild disappointment. Delving deeper into the report it appears that housing remains by far the best performing area with residential work expanding for the sixteenth consecutive month in December. However, this is in contrast to the commercial performance which experienced a moderate fall and continues the downtrend seen since July. Also of note is a sharp rate of input price inflation which seemingly continued last month and provides further evidence of the negative impact that above target inflation can have on the economy.
German unemployment hits record low
Coming hot on the heels of yesterday's strong EU manufacturing data, this morning has seen the release of a stellar employment report from Germany which shows that in December the jobless rate came in at its lowest ever level of 5.5%. Due to the downward revision of Novembers data to 5.5% this latest point isn't technically a drop, but nonetheless it further supports the notion that the Eurozone economy is in rude health. Tuesday's trade saw a red start for stocks on the continent with the Eurostoxx and Dax both a fair way lower by lunchtime, but the entrance of the US in mid afternoon saw a recovery into the close with these benchmarks ending the day little changed. This morning has seen small gains for European indices and with the US stock market rally appearing to remain in full swing, with the Nasdaq breaching the 7000 level for the first time ever yesterday, the early year weakness on this side of the Atlantic may have provided a nice buying opportunity.
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