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Over in the UK, the Bank of England had to admit that they got it wrong about Brexit when they predicted a sharp downturn. Yesterday buoyant service sector showed that the UK economy continues to defy expectations of a Brexit slowdown. The activity index printed at 56.2 and rose to its highest level in 17 months and when combined with the rise in the manufacturing index, these reports took the Composite PMI release to its highest level since July 2015. Despite the upbeat performance of the UK economy, the pound will likely stay under pressure as Brexit remains a serious risk that will certainly return later in the year as Article 50 will be triggered.
Last Nonfarm Payrolls data under Obama’s presidency
It is now only two weeks before President Obama leaves office and this will be the last US Nonfarm payrolls of his eight-year presidency which will be the main focus today. The market consensus for today’s print is that the economy has created 175,000 jobs in December with unemployment expected to tick slightly up from 4.6% to 4.7%.
While yesterday’s ADP print in the US was slightly disappointing, data out of the services sector was a little bit more encouraging. The services PMI was revised up at the final count to 53.9 in December from the earlier 53.4 reading; any reading above 50 indicating growth.
Better than expected data in the Eurozone
Data from the Eurozone was also better that the market had anticipated. PMI were released from Germany’s construction sector and showed a reading of 54.9 in December, up from 53.9. The German Retail PMI index also increased from 49.6 to 52.0. In other news, producer prices in the Eurozone rose with inflation accelerating by 0.3% as the weaker euro seems to have lifted the economy.
Data to come
Today, the data will come from Germany where we’ll get November retail sales and factory orders numbers. Trade balance will be released in France and finally, retail sales and confidence indicators for December in the Euro area. The US will come into focus in the afternoon as December employment report is scheduled for release.
