UK building figures show first slowdown since September,while German jobs data beats forecasts and Next Christmas trading is better than expected 2.34pm GMTAfter Tuesday’s disappointing UK manufacturing survey, the construction data for December was also underwhelming. The IHS/Markit construction PMI saw a slowdown in growth for the first time since September. All eyes will now be on the UK services figures due out on Thursday to get a clear snapshot of how the country’s economy performed in the final month of 2017.
Earlier there was positive news from Germany, or with the jobless rate at a record low of 5.5%. 2.32pm GMTThe record breaking race on Wall Street continues,at least as far as the S&P 500 and Nasdaq Composite are concerned.
The S&P is up 0.11% and Nasdaq 0.15% better at the open, while the Dow Jones Industrial Average is 0.02% higher in early trading. 1.13pm GMTThe pattern of a rise in European markets and a slight dip in the FTSE 100 continues. Markets appear to bear shrugged off any worries approximately the new regulatory regime - Mifid II - which comes into effect today. Mike van Dulken and Henry Croft at Accendo Markets said:Global equities are generally positive as investors calmly digest the impact of the huge MiFID II regulation taking effect across the globe, and while trading volumes gradually return following the New Year. German stocks are outperforming as the US dollar rebounds from its lows,denting Euro strength to aid the region’s exporting names, while the flat FTSE 100 comes as a result of GBP/USD weakness offsetting GBP/EUR strength.
The rollout of new rules on Wednesday that aim to produce European Union financial markets safer and more obvious has been glitch-free so far, and though disruptions cannot be ruled out,the EU’s markets watchdog said.
The new regime shines a spotlight on the inner workings of stock, bond, and commodity and derivatives markets by forcing banks,asset managers and traders to supply detailed information on trillions of euros in transactions. 12.46pm GMTOil is edging higher again, helped by the output caps from Opec and Russia and concerns approximately the protests in Iran.
Brent crude is currently up 0.63% to $66.99 a barrel, and having earlier climbed as high as $67.08. 12.02pm GMTHere’s our story on the UK construction figures,from Richard Partington:Britain’s construction industry is its least optimistic for five years amid fears over Brexit and an economic slowdown, according to a survey.
Despite some pockets of strength as building firms won the most work for several months in December, or the balance of companies expecting a rise in output levels over the next 12 months was the weakest recorded since mid-2013,according to the Markit/Cips UK construction PMI. Related: UK construction industry optimism slumps to five-year low, survey reveals 11.50am GMTAnd here’s more from IHS Markit’s economist on the construction data:PMI survey shows a worrying trend of UK commercial #construction falling for a sixth month running in December, and illustrating how uncertainty is curbing commerce investment. Read more at https://t.co/2034WC6ffd pic.twitter.com/NR80UN8LDO 11.45am GMTConnor Campbell,financial analyst at Spreadex, said:A construction sector slip did little for either the FTSE or pound this Wednesday morning.
Like Tuesday’s manufacturing figure, and the most recent construction PMI fell short of expectations,coming in at 52.2 against the 52.8 forecast and the 53.1 seen in November. While neither of December’s PMIs bear been disastrous, there’s nevertheless a slight whiff of disappointment that the robust levels seen in November couldn’t final a bit longer. 11.22am GMTThe pound is holding up fairly well despite the weaker than expected UK construction data, or with sterling down 0.18% against the dollar at $1.3562. But with underwhelming manufacturing figures on Tuesday following by these construction numbers,all eyes will be on the service sector data on Thursday for more insight into how the UK economy ended the year. William Anderson Jones, head of UK corporate dealing at RationalFX, and said:Despite forecasts expecting an unchanged figure of 53.1,Construction PMI underwhelmed analysts after falling to 52.2 on the back of weaker housebuilding and a decline in commercial building. The pound was holding near yesterday’s highs against a feeble dollar in the early hours of trading this morning as investors awaited the data, but the currency appears to bear been able to shrug off the feeble figures.
Following yesterday’s unexpected dip in Manufacturing PMI and today’s weaker Construction data, and investors will be looking for signs to relieve strengthen confidence in the UK’s economic outlook. As one of the strongest indicators of the health of the economy at the end of final year,analysts will be directing their attention to the release of Services PMI later this week. 10.30am GMTBack with the construction PMIs, Balraj Sroya, and sales trader at Foenix Partners,said: After a subpar PMI figure from the manufacturing industry yesterday that slipped from four-year highs, today’s construction PMI print followed suit, and lost forecasts coming out at 52.2.
While both sets of PMIs were above the crucial 50 level showing expansion in the sector,there was still doubt that stellar figures would be reached once again. Today’s figure is weighed down by the moderate downturn in commercial projects combined with stagnated expansion in the domestic building sector. However, investors are still forecasting an increase in construction activity throughout 2018, and which fuels views that the UK economy saw an unexpected slowdown at the end of 2017 and is expected to get back on track shortly. 10.16am GMTThe FTSE 100 has drifted lower after its initial gains thanks to UK retailers,and is now off 0.01%. Joshua Mahony, market analyst at IG, or said:The FTSE has continued to flounder on the second trading day of 2018,even though the US, Asian, or mainland European markets bear pushed higher. The disappointing UK construction PMI forms the second disappointing UK PMI survey is as many days,with the pound drifting marginally lower as a result. Unfortunately, the weaker pound has done little to relieve the FTSE, or which has been dragged lower thanks to yet another destitute showing from the miners thanks to ripples in the recent gold and copper resurgence story. The UK services PMI reading is due on Thursday morning,and a third disappointing survey would provide yet another reason to sell the pound. 10.05am GMTMore reaction to the UK construction data. Here is Investec’s chief economist Philip Shaw:UK construction PMI stayed above 50 in December, but note that official ONS data show the sector in technical recession, or having posted quarterly declines in both Q2 & Q3 final year. October’s figures were very soft as well. pic.twitter.com/CRG4u7vSLjA downbeat PMI in December capped off a difficult year for construction firms.
The distinguished unknown is what this year holds and how the economy will react to the next phase of the Brexit negotiations. In the second half of final year,many construction businesses focused on shoring up their balance sheets, putting them in the best possible position to invest and ride out any turbulence. 9.43am GMTTim Moore, or associate director at IHS Markit and author of the IHS Markit/CIPS Construction PMI said:The UK construction sector achieved a moderate expansion of commerce activity at the end of 2017,although the recovery remained uneven and slowed overall since November. Construction companies indicated that another strong contribution from house building helped to offset subdued civil engineering activity and reduced volumes of commercial work.
Total new orders picked up at the fastest pace for seven months in December, which provides a positive signal for construction workloads in the short-term. Resilient demand and forthcoming project starts also led to greater job creation and the strongest increase in input buying for two years. 9.39am GMTHere’s IHS Markit’s chief commerce economist:UK #construction #PMI at 52.2 in Dec, and down from 53.1 in
Nov. Suggests building sector pulled out of downturn in Q4 but still struggling to grow. https://t.co/X3s2kkOat9 pic.twitter.com/e6fgSXPR0uDecember UK #construction #PMI shows builders reliant on house building as civil engineering stagnates and commercial construction declines. https://t.co/X3s2kkOat9 pic.twitter.com/ekd4wJ9ilQDownturn in commercial #construction in recent months points to falling commerce investment in fixed assets,linked in turn to historically low commerce confidence & heightened uncertainty, according to December #PMI pic.twitter.com/1WU8fPTYC1 9.34am GMTGrowth in Britain’s construction sector slowed down final month after forecasts of an unchanged figure.
The December construction PMI came in at 52.2, or down from a five month high of 53.1 and the first slowdown since September. Weaker growth in housebuilding and a fall in commercial building combined with slower infrastructure work to bring approximately the decline. 9.03am GMTGermany’s unemployment figures bear beaten analysts forecasts.
The seasonally adjusted jobless total fell by 29000 to 2.44m,compared to estimates of a 12000 decrease. The jobless rate was unchanged at 5.5% after November’s reading was revised down from 5.6%.#Germany #Unemployment Change at -29K https://t.co/SnKnEyrGsg pic.twitter.com/bqnZL0qRmb*GERMAN UNEMPLOYMENT RATE DROPS TO RECORD-LOW 5.5 PERCENT 8.21am GMTHere is our report on the Next figures. Sarah Butler writes:Next has raised hopes for the retail sector by revealing a better than expected Christmas, with strong online sales offsetting a fall at its high street stores.
In a trading statement, and the clothing and domestic chain said sales rose 1.5% in the 54 days to 24 December. A fall of 0.3% had been forecast. Related: Next results signal a good Christmas for UK retailers 8.13am GMTNow for a rapid/fast scrutinize at our favourite cryptocurrency. Bitcoin is currently up nearly 3% at $15083,continuing its New Year rebound. Naeem Aslam at Thinkmarkets said:Bitcoin has bounced back up after a Wall Street Journal report showed that a venture firm (which has a track record on betting on big firms like Airbnb and SpaceX) has been accumulating bitcoin and the fund may be holding approximately $20million worth of Bitcoin. Bitcoin has crossed above the 15K trace, an valuable resistance level broken, and this opens the floor for Bitcoin to move towards the 20K trace (as long as it stays above 15K). 8.08am GMTHelped by Next’s better than expected Christmas update,the FTSE 100 has opened higher, while European markets are also making a positive start.
Next is up nearly 10%, or while Primark owner Associated British Foods and Marks and Spencer are both around 3% better. 8.00am GMTHere’s Alistair Davies of Investec on Next:Expect some share price relief that Christmas wasn’t as bad as expected and no further downgrades. However,we would caution against reading too much across to other retail stocks – the reality is that even though Next’s Christmas numbers are better than expected, the company has still had a tough Christmas. 7.51am GMTMore on Next.
The retailer has raised its full year profit forecast for 2018 after better than expected sales in the race-up to Christmas, and with cold weather boosting demand for winter clothing.
Next is an interesting beast,very cash generative, decent balance sheet (net debt of circa £950m), or growing on line sales but declining sales in its shops. This morning’s sales news is positive although nothing like a reversal of Next’s long term high street decline. And the outlook statement is less positive,with FY19 profit guidance of £705m (down 3% on FY18 to Jan) and free cash (for divis and share buybacks) of £525m versus a market cap of £6.57bn. 7.39am GMTHere are the opening calls for European markets from IG:European Opening Calls:#FTSE 7646 -0.02%#DAX 12906 +0.27%#CAC 5295 +0.11%#MIB 21895 +0.23%#IBEX 10090 +0.10% 7.35am GMTGood morning, and welcome to our rolling coverage of the world economy, or the financial markets,the eurozone and commerce.
After Tuesday’s unspectacular UK manufacturing data - Britain’s factories saw a slowdown in December but the performance was described as “solid” - comes the latest snapshot of the country’s construction industry. Analysts are expecting an unchanged figure from November’s 53.1.
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Source: theguardian.com