Manufacturing data dominated the first trading day of the year. Firstly, UK manufacturing gave Sterling a boost early in the morning. Manufacturing registered a much better than expected 56.1 against a forecast 53.3, its highest reading since July 2014.
The States followed suit in the afternoon, also exceeding economists’ consensus. US Manufacturing PMI expended at the fastest pace in two years, reflecting firmer output and the biggest pickup in order growth since August 2009. The bullish news pushed the Greenback higher against the Euro, nearly 1% higher on the day.
In other news, Oil rose to the highest level in 18 months as the OPEC cut in production began to take effect. West Texas Intermediate shot up to $55 a barrel yesterday after Kuwait reported that the country has cut output by 130,000 barrels a day. The statement suggests that the OPEC deal has and will be implemented successfully.
Another volatile day is expected today as we have three pieces of high tier data released throughout the day. Firstly, construction PMI from the UK is forecast to decline from last month’s reading to 52.6. Then, in the afternoon, the Eurozone release a key piece of inflation data in the form of CPI (consumer price index), expected at 1.0%. Finally, and arguably the biggest piece of news of the week; the FOMC’s December minutes. The FOMC raised rates last month and Fed Chair Janet Yellen’s dot plot chart was surprisingly hawkish, markets will look to see if this tone was felt throughout the committee.
Have a good day.