02/06/2017 - Robust Manufacturing Figures For UK 

GBP

UK manufacturing put up another robust performance in May, following April’s strong showing. The Markit manufacturing PMI came in at 56.7, beating expectations of 56.5, but down on April’s 3-year high figure of 57.3. Manufacturing production and new orders both expanded at above survey average rates, while companies benefited most from the continued strength of the domestic market as well as Exporters taking  advantage of a weak sterling.
 
Manufacturing output appears  to  be growing at a solid rate however many economists  argue that the manufacturing sector is too small to prevent the overall economy from struggling again in the second quarter
 
Billionaire investor George Soros said in a key note speech it may take the U.K. as long as five years to leave the European Union, with the process set to do major harm to both parties. Urging the world’s biggest trading bloc to avoid penalising Britain and instead focus on reforming itself.

USD

The USD strengthened yesterday after the ADP report on private sector employment showed that the US economy had created more jobs than previously expected in May. The report showed that employers added 253,000 jobs last month, 68,000 more than forecast by Economists.  This in turn has reinforced expectations of a hike in US interest rates by the Fed which caused USD to hit session highs against major currencies including JPY, EUR and CHF.
 
Although data released on Friday indicated a 1.4% dip in US construction spending this was offset by a positive US manufacturing report which showed its index edging up to 54.9. The flurry of positive data will prompt economists to have a more optimistic outlook on today’s Bureau of Labor Statistics report of Non-Farm Payrolls and possibly even decrease the estimate for the headline unemployment number, in turn strengthening interest rate expectations throughout the US economy.

Key Announcements

09.30 – GBP: Construction PMI Forecast at 52.7 against previous of 53.1

13.30 – USD: Average Hourly Earnings MoM; Forecast at 0.2% against previous of 0.3%

13:30 - USD: US Unemployment rate (May) expected to remain unchanged at 4.4%

13:30 - USD: US non-farm payrolls (May) expected to fall to 185K from 211K