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Markets await UK and US Manufacturing data

  • EUR German Retail Sales m/m: 1.7%
  • EUR German Unemployment Change: -7K
  • EUR CPI Flash Estimate y/y: 0.2%
  • EUR Core CPI Flash Estimate y/y: 0.8%
  • USD ADP Non-Farm Employment Change: 177K
  • USD Chicago PMI: 51.5
  • USD Pending Home Sales m/m: 1.3%
  • USD Crude Oil Inventories: 2.3M
  • NZD Overseas Trade Index q/q: -2.1%
  • JPY Capital Spending q/y: 3.1%
  • AUD Private Capital Expenditure q/q: -5.4%
  • AUD Retail Sales m/m: 0.0%

Eurozone data was the immediate focus of the markets yesterday, as there was a string of medium tier data releases from the single currency. The results were mixed as German Retail Sales and Unemployment outperformed expectations, whilst inflation data for the Eurozone painted a lacklustre picture. Despite a prolonged period of monetary easing by the ECB and recovering energy prices, inflation numbers are a major concern as inflationary pressure in the Eurozone remains conspicuous by its absence. 

The focus in the afternoon switched to the US where we had the unofficial, privately collated, ADP Non-Farm Employment Change number and a handful of less significant data. The ADP Non-Farm figure of 177K was marginally better than expected, but still showed a decline from last month’s strong 194K reading. As the Fed indicate that a rate hike in the US is still possible, these numbers will whet the appetite ahead of Friday’s official government Non-Farm figure.

  • EUR Spanish Manufacturing PMI
  • GBP Manufacturing PMI
  • USD Unemployment Claims
  • USD Revised Non-Farm Productivity q/q
  • USD ISM Manufacturing PMI

Today, the focus will return to the UK and US as the Manufacturing sentiment figures for both countries are released. After being hit by the Brexit, the UK sentiment figure will be heavily scrutinised to see whether it can make any progress back towards the 50.0 break-even point between expansion and contraction. The reading is expected to improve on last month from 48.2 to 49.1. 

The US ISM Manufacturing PMI, is likely to stay above 50.0, but is expected to drop lower to 52.0. Similar to employment data, these readings are of importance to the Federal Reserve as they deliberate on further interest rate hikes in 2016.