Eurozone output expanded for the fourteenth successive month in August, according to the latest PMI surveys from Markit. At 52.5 in August, the final figure eased from July’s three-month high of 53.8 to signal the weakest rate of increase during the year so far.
Output growth slowed in both the manufacturing and service sectors in Europe. Manufacturing production increased at the slowest pace for 14-months, while the rate of growth at service providers was the weakest since June. The stronger expansion was again recorded in services.
Spain output growth hit a 89-month high with the performance of the service sector especially positive. Although Germany saw economic activity expand for the sixteenth month running, growth slowed for both manufacturers and service providers
U.K. services grew unexpectedly in August, countering a pullback in manufacturing and further reinforcing the UK’s economic recovery’s dependence on domestic demand. Markit Economics PMI rose to a 10-month high of 60.5 from 59.1 in July. Markit believe that based on factory and construction surveys the UK economy will grow about 0.8 percent this quarter, in line with the previous three months.
Manufacturing and exports are under pressure from the poor performing euro-area economy and tensions related to the conflict in Ukraine. Unbalanced growth may help Bank of England Governor Mark Carney’s case to keep record low interest rates into 2015.
The Uncertainty surrounding the Scottish independence vote is also weighing heavily on the pound with the vote due to commence in two weeks.
12:00 – GBP - UK Asset Purchase Facility – Expected to stay at 375B
12:00 - GBP - Official Bank Rate – Predicted to stay unchanged at 0.5%
13:15 – USD - ADP Non-Farm Employment Change – said to come in at 216K from 218K
13:30 - USD – Trade Balance – expected to decrease to -42.5B from -41.5B
13:30 – USD - Unemployment Claims – Expected to stay the same at 298K
15:00 – USD - ISM Non-Manufacturing PMI - Expected to fall to 57.3 from 58.7
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