Daily Market Report 03/09/15

GBP
Yesterday data showed a pick-up in house building helped growth in Britain’s
construction sector speed up slightly last month, but the expansion remained
weaker than last year’s robust rebound. The Markit construction Purchasing
Managers’ Index (PMI) rose to 57.3 in August from 57.1 in July, indicating
solid growth but below the 57.5 forecast. The survey published on Wednesday
showed construction firms were bullish about the future, with most firms

GBP
Yesterday data showed a pick-up in house building helped growth in Britain’s
construction sector speed up slightly last month, but the expansion remained
weaker than last year’s robust rebound. The Markit construction Purchasing
Managers’ Index (PMI) rose to 57.3 in August from 57.1 in July, indicating
solid growth but below the 57.5 forecast. The survey published on Wednesday
showed construction firms were bullish about the future, with most firms
expecting to be busier over the coming year, while only one in 20 expected a
contraction. On the back of this Sterling lost ground against both the EUR and
USD.

USD
The ADP estimate yesterday showed that American companies created slightly
fewer jobs than expected in August, adding to the poor manufacturing data seen
in the US this week. The ADP report shows that 190,000 new employees were hired
in August, below the 200,000 that was forecast. Also July’s reading has also
been revised down, from 185,000 to 177,000. This suggests that Friday’s
non-farm payroll, the main measure of US employment, could be weaker than
expected.

US factory orders in July came in lower than expected, up 0.4%. This was lower
than the forecast 0.9% and well below the 2.2% gain recorded in July. Poor data
this week and the continuing crisis in China may result in the Fed delaying
their interest rate hike this month. Towards the afternoon we saw the USD
weaken on the back of this data.

The Feds Beige Book released last night said the economy continued to grow
throughout most of the country during July and August, stating the solid
rebound in economic growth in the second quarter continued into the summer but
at a more moderate pace.

Key Announcements

EUR – 09:00: Markit Services PMI expected to
stay the same at 54.3
GBP – 09:30: Markit Servies PMI expected to increase to 57.6 from 57.4
EUR – 12:45: ECB Interest Rate Decision expected
to remain unchanged at 0.05%
EUR – 13:30: ECB Monetary Policy Statement 
USD – 14:45: Initial Jobless claims expected to rise from 271K to 275K.