Daily Market Report 05/11/2013


UK Construction firms have continued to grow in October. Showing the strongest one month improvement to activity since before the financial crisis. Markit’s PMI data showed that construction growth had improved from 58.9 to 59.4. Well above the 50 mark which indicates growth in the sector.

There was also a report out from Reed Plc indicating job numbers in the UK have hit a 5 year high. This continues the recent trend of optimism around the UK economy. A better jobs picture for the UK would give a good case for the Bank of England to raise interest rates.

A report out today from NIESR (National Institute of Economic and Social Research) has said that there is a 1 in 5 chance that the BoE will raise interest rates as early as the first quarter of 2014. However, they feel it is more likely to rise in mid-2015, around a year before the BoE’s forecast. The NIESR are also set to publish their GDP forecasts for the three months leading up to October on Wednesday.


Data from the Eurozone yesterday was all based around manufacturing. France and Italy’s output reduced from a month earlier, Spain stayed the same, Germany showed an improvement and the Eurozone as a whole improved on a month earlier but came in as expected at 51.3.

This morning there were unemployment figures released from Spain that showed an increase of the number of additional unemployed people from 25,000 to 86,000 for the month of October. As a result we are seeing the euro weaken in early morning trade.


US data showed that the number of factory orders increased in October to 1.7%. The data did little to support the US dollar however, as it looks like we saw profit taking on the US dollar following last week’s better than expected manufacturing figures, ahead of key data from the labour market in the US on Friday.


The Reserve Bank of Australia unsurprisingly held interest rates at 2.5% again for this month. Whilst there are some analysts speculating that this could be end of rate cuts to be made by the RBA, Governor Glenn Stevens maintained his tone that the value of the dollar remains uncomfortably high in order to achieve balanced growth in the economy. The comments weren’t really a surprise, as Stevens made similar comments two weeks ago and as a result losses on the dollar were limited.


Service sector figures from the UK this morning has surpassed expectations and we are seeing the pound rally further this morning.

The US will be in focus this afternoon also with their own service sector figures, which are expected to be lower than the previous month.

Key Announcements:

10.00am – EUR – Economic Growth Forecasts.

10.00am – EUR – Producer Price Index (Sep): Expected to fall to by 0.7%.

15.00pm – USD – ISM Non-Manufacturing PMI (Oct): Expected to drop to 54.

21.45pm – NZD – Unemployment Rate (Q3): Expected to fall to 6.3%.