Sterling and stocks rally on positive manufacturing PMI reports
19:00, 31 August 2016
· By CMC Markets
Stock markets around the world are trading higher to kick off September on a positive note, particularly in Europe. The Dax is up 0.5% while the CAC is up 1.0%, the IBEX up 1.6% and the FTSEMIB up 1.4%. US index futures are up 0.25% while the FTSE is down marginally held back by a big figure rally in GBP.
Positive sentiment to start what has historically been a volatile month for stocks has been driven by a number of positive manufacturing reports. A number of countries either beat the street or improved over last month. Both the UK and China climbed back above 50 boosting the Hang Seng and igniting a rally in GBP. Japan, India and Spain also posted positive numbers while Sweden and Norway missed significantly. Australian PMI fell off a cliff made worse by poor retail sales and capex results for the country. UK PMI showing that the feared Brexit recession was a pipe dream combined with Greece regaining 50 appears to be helping stocks on the continent rebound where indices had been underperforming for much of the year giving them lots of room for catch up.
Moving to North America today, US and Canadian manufacturing PMI reports plus US construction data may attract attention from traders. In the US, data may be seen through the lens of Fed speculation with traders considering whether an event makes a September rate hike more or less likely.
CAD could be active on the Canadian PMI report with traders interested in whether the rebound from the Fort McMurray wildfire that GDP figures showed starting in June has continued into the summer.
Dollarama $0.88 vs street $0.84, same store sales 5.7% as expected
Japan Q2 capital spending 3.1% vs street 5.5% vs previous 4.2%
Australia Q2 private capex (5.4%) vs street (4.0%) vs previous (5.2%)
Australia retail sales 0.0% vs street 0.3%
Australia commodity index 0.8% vs previous (2.0%)
Norway retail sales (0.6%) vs street 0.3%
Manufacturing PMI reports:
China official 50.4 vs street 49.8 vs previous 49.9
China official non-man 53.5 vs previous 53.9
China Caixin 50.0 vs street 50.1
UK 53.3 vs street 49.0 vs previous 48.2
Germany 53.6 as expected
France 48.3 vs street 48.5
Spain 51.0 vs street 50.9
Italy 49.8 vs street 51.2
Sweden 50.7 street 54.0
Norway 50.8 vs street 54.7
Poland 51.5 vs street 50.6
Greece 50.4 vs previous 48.7
Japan Nikkei 49.5 vs previous 49.6
Australia 46.9 vs previous 56.4
India Nikkei 52.6 vs previous 51.8
Upcoming significant economic announcements include:
8:30 am EDT US jobless claims street 265K
10:00 am EDT US construction spending street 0.5% vs previous (0.6%)
10:30 am EDT US natural gas street 41 BCF
Upcoming Manufacturing PMI reports:
9:30 am EDT Canada previous 51.9
9:45 am EDT US Markit street 52.1
10:00 am EDT US ISM street 52.0 vs previous 52.6
10:00 am EDT US ISM new orders previous 56.9
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