UK Services PMI beat expectations, posting a bullish 54.5 for February. The report showed strong job creation across the service sector, with payroll numbers being the highest since September. Cost pressures dropped to their lowest for a year-and-a-half. Service providers showed confidence in the business outlook over the next year.
Across the pond, the ISM Non-Manufacturing PMI was released. The figure beat expectations, posting 59.5 for February, only 0.4 points below the January reading. Educational services and transportation & warehousing reported the highest growth. The business activity index was also released and posted 62.8%, up 3% percentage points from the previous reading. The respondents showed their consumers’ confidence had increased and that they felt business was improving.
US President, Donald Trump’s top economic adviser, Gary Cohn resigned after refusing to back Trump in the tariff plan that was announced last week. The Dollar declined on the announcement of his resignation. The tariff plan will see 25% tariff placed on steel and 10% on aluminium imports. The European Union have voiced concerns over the plans, hoping the US will not follow through with them. This comes as Trump threatened to impose a 25% tax on European cars if the EU retaliate on the tariffs.
Back in the UK, Chancellor of the Exchequer, Philip Hammond, will be giving his vision for Brexit speech today. In the speech, he is expected to try to convince the EU that financial services should be in the free trade agreement as it is in the ‘mutual interest’ of both parties. However, it is expected EU President Donald Tusk will reject this proposal in his speech on the future relationship, just before Hammond speaks.
In the US, ADP Non-Farm Employment Change is expected to drop from last month’s reading, to post 194k. FOMC member Raphael Bostic will be speaking on the Economic Outlook. The Bank of Canada will be releasing their latest rate statement and interest rate decision. It is unlikely the Bank will decide to raise rates as the economy is seen to have been growing slower than expected in last week’s GDP reading, posting an annualised figure of 1.7%, rather than the 2% expected.