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While the Bank of England governor may be reticent about the UK recovery, recent data continues to shine. Despite seeing a slight pullback from the previous month, the services sector is indicating strong activity with the headline index above 60. Sterling caught a bounce on the news and remains steadfastly above $1.62. Spain was the only fly in the ointment for eurozone PMI data; the rise through the 50 level last month was short-lived and now indicates that the sector is contracting.
The fact that easyJet has raised its annual profit guidance on the back of strong demand in the previous quarter has led to increased investor interest. The share price is off its highs for the year but added 1.3% in early trade. Other low-fare airlines may finally have to come around to the idea that good manners ultimately pay dividends and more importantly cost nothing.
The share price of BP has been under pressure of late owing to the uncertainty surrounding the level of compensation due for the oil spill back in 2011. Now that the appeals court in the US have decided to halt some unnecessary payments for ‘bogus claims’ the share price has added 1%, but it is still some 10% below its high of this year.
We may not have non-farm payrolls data tomorrow due to the government furlough, but the US weekly jobless claims release will take on a new priority for dictating market direction later this afternoon. The consensus expectation is that 315,000 individuals filed for unemployment insurance for the first time last week, an increase of 10,000 on the previous week’s figure.
US non-manufacturing PMI has not disappointed lately and while we are expecting a small monthly decline, today should be no exception. Consensus is for a 57.2 print. President Obama’s comments that Wall Street should be worried have been somewhat prescient, and we are calling the Dow Jones down by 57 points at 15,079.