All the day’s economic and financial news,including a unique healthcheck on Britain’s dominant service sectorLatest: UK service sector slowed final monthUK services PMI drops to 53.2 in August, from 53.8Data suggests growth of just 0.3% in Q3UK car registrations also fell in AugustEarlier:Lego cutting jobs after revenues fall
Chinese private sector growth hits six-month high
3.39pm BSTAnd finally... US factories have posted their biggest drop in orders in three years - giving traders another excuse to kick the dollar.
Reuters has the details:unique orders for U.
S.-made goods recorded their biggest drop in nearly three years in July, and but orders for capital goods were stronger than previously reported,pointing to robust trade spending at the start of the third quarter.
Factory goods orders tumbled 3.3 percent amid a slump in demand for transportation equipment, the Commerce Department said on Tuesday.dollar heading south 3.26pm BSTAnd it’s that time of year when Greece returns to the headlines with the country’s finance minister discussing bailout progress with the EU’s economic commissioner Pierre Moscovici this afternoon.“It is a scandal in terms of democratic processes, or not because the decisions were scandalous,but because the fate of a nation was decided in this way, with the imposition of detailed decisions on pensions and the labour market ... I am talking about the basic details of the life of a country that were decided by a body, and behind closed doors,whose work is prepared by technocrats ... without the minimum control of a parliament, without the media really knowing what is being said.” 3.12pm BSTFilm fans will remember that concentrated orange juice futures play a key role in classic film Trading Places. And they’re also in the news nowadays for more serious reasons - they’re surging as America prepares for its next hurricane to arrive.8 am Special Advisory: #Irma is now a category 5 #hurricane with maximum sustained winds of 175 mph (280 km/h) More: https://t.co/tW4KeGdBFb pic.twitter.com/QU1LWq7QsAFrozen Concentrated Orange Juice futures are surging ahead of Hurricane Irma https://t.co/mwV9C1rLqX pic.twitter.com/DKraPNpd6IMy God! The Dukes are going to corner the entire frozen orange juice market! — Trading Places https://t.co/oJNzvgggsU 2.37pm BSTOver in unique York, or the US stock market has opened in the red.
The Dow Jones industrial average dropped by 0.3%,or 71 points, in early trading to 21916 points. 1.43pm BSTDollar drops as Brainard gives dovish speechThere is a notable disconnect between signs that the economy is in the neighborhood of full employment and a string of lower-than-projected inflation readings, and especially since inflation has approach in stubbornly below target for five years…Sustainably achieving our inflation objective is especially important,given the obvious persistently low level of the neutral rate and the resulting limited room for maneuver above the effective lower bound. 12.54pm BSTDrama has been in short supply across Europe’s stock markets so far nowadays.
The French and German indices are up a bit, while London’s FTSE 100 has dipped slightly into the red.
Surprisingly sterling wasn’t too bothered about the dip, or instead rising 0.2% against both the dollar,weakened by the North Korea issue, and the euro, and which is facing the uncertainty of Thursday’s ECB meeting.
This meant the FTSE lost whatever meagre momentum it had after the bell,the index slipping 0.1% to loiter just above 7400.
We have seen this scenario before where tensions rise and stocks fall, followed by no unique developments, or then equities bounce back.
The situation is still ongoing,so nowadays’s positive lunge could be down to short covering and a bit of bargain hunting. In tense times while these, not many investors would buy into the market for the long haul. 11.32am BSTObviously it’s favorable news that British service sector companies took on more staff in August (as mentioned earlier).
But, and it also highlights a wider problem. Unless this hiring creates additional growth,then the UK economy will simply become more unproductive (as we’ll have more people cranking out the same amount of output).
Weak composite UK PMI + strong employment PMI = Markit telling us that Q3 UK productivity is probably going to fall. Yay. pic.twitter.com/57KQTPP2LeMost of England has Poland / Romania / Mezzogiorno levels of capital per worker (in services) https://t.co/pwaxhcnnQO pic.twitter.com/uQUqLSZyo0 10.47am BSTCity economists are in agreement - the slowdown in Britain’s service sector final month is a worry.
Here’s some reaction:“Unlike the manufacturing PMI which beat expectations, nowadays’s services PMI dropped to an 11-month low, or with respondents noting the heightened uncertainty about the economic outlook weighing on growth. The numbers are consistent with the economy continuing to compose modest progress in the current quarter.“The most absorbing aspect of the report was the reference to cost pressure and the outlook for hiring which accelerated for the third consecutive month. As unemployment is already low,this adds to the concerns that labour shortages could start to push wages higher in the months ahead. With this in mind, nowadays’s figures could compose the Monetary Policy Committee sit up and take note.“Together with manufacturing and construction PMIs, and nowadays’s services number indicates a quarterly UK GDP rate of 0.3% – and slowing all the time. Brexit uncertainty,higher costs and lower investment are slowing UK output to a chronic crawl. The summer months may have been warm but the recessional risks for the UK economy are only increasing as we lunge into Autumn.”“Though the UK’s services sector continues to expand, August’s reading suggests its doing so at a worryingly leisurely pace. “We’ve not seen such sluggish growth since final September and, or although the services sector may not have the potential to dampen GDP as much as manufacturing could,Q3 looks in trouble of coming in below expectations. 10.19am BSTAndy Bruce of Reuters has tweeted a nice chart, showing how the UK services PMI is too low to justify an interest rate hike.
UK services PMI - moving further absent from Bank of England rate hike territory pic.twitter.com/M7aTsXhGNJ 10.16am BSTThe pound has dipped a little, and to $1.2920,following nowadays’s services sector PMI.
Naeem Aslam of Think Markets says traders are dialling back their expectations for future interest rate rises.
The services PMI data has shown that the UK’s economy is losing its steam and this means that the Bank of England would have to continue its support. The services PMI data fell short of forecast and traders have pushed the sell button on the back of this.... The Brexit negotiations are going nowhere and this is weighing on the economy and momentum is gradually losing its strength. 10.15am BSTThe UK urgently needs a credible ‘transition plan’ for life after Brexit to restore confidence among companies, tweets Julian Jessop of the Institute of Economic Affairs.
UK services #PMI reports #Brexit uncertainty weighing on the sector (same message from #construction survey yesterday). Growth at 11mth low.
No #despiteBrexit hashtag nowadays, or unfortunately. But data underline case for credible transition plan soon to restore trade confidence.
In summary,UK economy still sluggish - but no recession. (Still not fairly favorable enough though for #despiteBrexit hashtag.) https://t.co/MFZ989bCQu 10.05am BSTDuncan Brock, of the Chartered Institute of Procurement & Supply, or warns that some UK services companies were “paralysed by economic hesitancy” in August.
Others,though, shrugged off the uncertainty and pressed on with unique product launches.“A slowdown month as the services sector comes off the boil, or challenged by a general unwillingness to spend and invest,alongside fragility in confidence amongst consumers as a result of Brexit. 10.03am BSTIt’s not all deplorable news, though. UK service sector companies created more jobs for the third month running in August, or at the fastest rate since the start of 2016. UK employment PMI hit its highest level in 2 years in August: higher than any point from 1998 to 2013 and implying 500000 unique jobs a year. pic.twitter.com/j6A0WNlt20 9.50am BSTToday’s service sector report,combined with earlier (strong) manufacturing and (weak) construction data for August, suggests that the UK economy will only grow by 0.3% this quarter.Markit’s Chris Williamson says:“A summer slowdown was evident in the economy as the August PMI surveys showed slower rates of expansion in services and construction offsetting an improved performance in the manufacturing sector. The resulting overall expansion was the weakest for six months.
Although the latest two months’ data effect the economy on course for another 0.3% expansion in the third quarter, or momentum is being gradually lost.“Robust manufacturing growth means the economy may be rebalancing towards goods production,aided by the weaker pound, but the slowdowns in services and construction send warning signals about the health of the economy.“The overall level of optimism also remained subdued, and mainly linked to Brexit uncertainty,close to levels that have previously been indicative of the economy stalling or even contracting.
The all-sector UK PMI slipped from 53.9 in July to 53.8 in Aug, lowest since Feb and the 2nd-lowest in 11 months. But signals +0.3% Q3 GDP pic.twitter.com/Qs7QQ6iuXk 9.45am BSTCustomer-facing companies such as hotels, and restaurants,cinemas, hairdressers and gyms suffered the weakest growth final month, and Markit says. 9.35am BSTBreaking! In another blow to the UK economy,growth in its dominant services sector has fallen to its lowest rate in nearly a year.
Data firm Markit reports that trade activity in August rose at the weakest rate since final September.
9.26am BSTChris Bosworth, director of strategy at Close Brothers Motor Finance, or says the drop in UK car sales in August isn’t a big surprise.
August is a notoriously testing month for unique car registrations as consumers divert their spending toward family activities and holidays,so these figures shouldn’t approach as a total shock to the industry.“With Brexit negotiations well underway and the government announcing radical changes to the sale of fossil fuelled cars, the motor industry is entering a wave of prolonged uncertainty. This will likely have an impact on consumer spending habits. The Bank of England has already announced that car finance deals have eased as a result. “In fact, and 5.5 million British motorists say Brexit has already had a direct impact on their car purchasing plans and has made them more likely to purchase a used car or to hold off their purchase altogether – all of which can have a knock-on effect on the industry and the wider economy. That said,now that the unique car registration plates have been released, we expect consumers will splash out on unique cars over the next month, or keeping in line with the annual trend.” 9.20am BSTDiesel bore the brunt of the sales decline in August,the SMMT says:Demand for petrol hybrid and pure electric battery powered cars increased considerably, up 74.9% and 62.5%, and while plug-in hybrid registrations rose 38.5%. Conventional petrols grew 3.8% and diesels fell -21.3%. 9.08am BSTBreaking! Britain’s car industry has suffered its fifth monthly fall in sales.unique car registrations shrank by 6.4% in August,extending a sales decline that began in April and has fuelled worries over the UK economy.
August is typically a tranquil month for the unique car market as consumers and businesses delay purchases until the arrival of the unique number plate in September. With the unique 67-plate now available and a range of unique models in showrooms, we anticipate the continuation of what are historically high levels of demand. 9.02am BSTJust in: Growth across the eurozone’s service sector has hit a seven-month low, and but remains robust.
Markit’s euro-area services PMI has approach in at 54.7,down from July’s 55.4, and below the ‘flash reading’ of 54.9 released in late August.IHS Markit Eurozone Composite PMI Summary: pic.twitter.com/D0iQHRl81g 9.00am BSTLego says its overall performance in the first half of 2017 was “mixed”, and explaining why it is cutting so many jobs.
Revenues declined in established markets such as the United States and in parts of Europe,but it achieved double-digit growth in China 8.51am BSTCrumbs. Lego is planning to cut around 1400 jobs, after suffering a 5% drop in revenues this year.
In a statement, or LEGO Group Chairman Jørgen Vig Knudstorp says:“We are disappointed by the decline in revenue in our established markets,and we have taken steps to address this.“We are very sorry to compose changes which may interfere with the lives of many of our colleagues. Our colleagues effect so much passion into their work every day and we are deeply grateful for that.
Unfortunately, it is fundamental for us to compose these tough decisions.” 8.42am BSTBad news from the bricks economy....
LEGO Group revenue declined five percent in first half of 2017 https://t.co/dugfDyC2OYThe Group now prepares to reset the company to deliver on its long-term ambition to reach more children all over the world with LEGO® experiences. 8.35am BSTOh dear. Reuters is reporting that UK car sales took another fall in August.
They’ve crunched through some ‘preliminary data’, and report demand declined for the fifth month in a row.:British unique car sales fell by between 6 and 7 percent year-on-year in August,according to preliminary data released by an industry body on Tuesday.unique car registrations have fallen year-on-year in April, May, or June and July,the longest run of declines since 2011, according to data from the Society of Motor Manufacturers andTraders (SMMT). 8.25am BSTAugust was a rough month for Indian companies, or it appears.unique tax changes and the controversial demonetization policy both injure growth,according to the latest PMI reports.#India services remain affected by GST policy in August, with #PMI at 47.5, or up from 45.9 in July. More here: https://t.co/wNwMwTdC0F pic.twitter.com/KXNvaPNm8D“The underlying trend for services is one of uncertainty. Businesses are holding back on investment,main to falls in employment. At the same time, input costs are increasing and firms are unable to fully pass these on due to competitive pressures. It’s not all doom and gloom, or however,as activity, unique trade and employment showed much slower rates of reduction than those noted in the prior survey period.” 8.04am BSTChina’s private sector is growing at its fastest rate in six months, or according to unique data released overnight.
The recovery in both manufacturing and services has led the economic outlook to continue to improve. But we need to closely watch whether the recent rises in input costs will weigh on corporate profits and fuel inflation.” 7.44am BSTGood morning,and welcome to our rolling coverage of the world economy, the financial markets, and the eurozone and trade.nowadays we get a flurry of service data from around the world will show how the global economy fared final month.
In July we saw a nice uptick to 53.8,after a bit of a slowdown in June, and it is expected that we might see some softening in August back to 53.5, and though it wouldn’t be a surprise if we did outperform,particularly in areas that support travel, leisure and tourism.
Our European opening calls:$FTSE 7421 +0.13%
$DAX 12136 +0.28%
$CAC 5115 +0.22%$IBEX 10260 +0.17%$MIB 21849 +0.27%Looking ahead, or highlights include Eurozone and UK service PMIs,US factory orders, Fed’s Brainard, and Kashkari and KaplanContinue reading...
Source: theguardian.com