UK Consumer Confidence drops to lowest level

Yesterday’s markets

8th July 2016

  • GBP Halifax HPI m/m: 1.3%
  • GBP Manufacturing Production m/m: -0.5%
  • EUR ECB Monetary Policy Meeting Accounts
  • USD ADP Non-Farm Employment Change: 172K
  • USD Unemployment Claims: 254K
  • USD Crude Oil Inventories: -2.2M
  • JPY Current Account: 1.41T

UK Consumer Confidence dipped to its lowest level in over twenty years, as ongoing fears of the economic consequences of Brexit continues to weigh on the UK economic outlook. The market research firm GfK conducted a one-off online survey of 2,000 people and it’s index fell by eight points to minus nine, a drop not since seen December 1994. A separate report suggested that Brexit worries were also weighing on recruitment in the UK ahead of the referendum. The number of people placed in permanent positions fell in June, marking the first decline in 45 months, according to a monthly jobs report from the data company Markit and the Recruitment and Employment Confederation (REC).

On the political front, Theresa May and Andrea Leadsom will battle it out to become the next leader of the Conservative Party, after Michael Gove was eliminated from the contest. After the second MPs' ballot, Home Secretary Mrs May finished with 199 votes. Energy Minister, Mrs Leadsom had 84 votes and Mr Gove, the justice secretary, finished on 46 votes. Conservative members will now decide the winning candidate, with the result due to be released on 9th September. Theresa May at present has a larger support base than Leadsom, and steps into the next couple of months of campaigning with the confidence of knowing the bulk of her parliamentary colleagues are behind her. 

Today’s markets

7th July 2016

  • GBP Goods Trade Balance
  • USD Average Hourly Earnings m/m
  • USD Non-Farm Employment Change
  • USD Unemployment Rate

The major data release today is the USD Non-Farm Payrolls figure. Job creation is one of the most important leading indicators of overall economic activity. The release of US Non-Farm Employment Change figure is highly anticipated, as the markets are expecting an improved figure than last month’s 38k. The markets will be looking for indications that May’s figure was an anomaly. Markets are forecasting a figure of 175k and whilst a rate hike seems to be off the table at present, a good figure will give the Federal Reserve plenty to consider at the next meeting. Finally the GBP Trade Balance and Canadian employment figures are expected this afternoon.