- BoE's Pill: We have seen more lasting changes to price and wage setting in UK
- UK September CBI trends total orders -27 vs -30 expected
- Are capital flows really moving away from the US this year?
- BoE's Pill: I wanted to keep QT at £100 billion in BoE vote last week
- Gold catches bids again in European morning trade
- UK September flash services PMI 51.9 vs 53.5 expected
- Eurozone September flash services PMI 51.4 vs 50.5 expected
- Germany September flash manufacturing PMI 48.5 vs 50.0 expected
- France September flash services PMI 48.9 vs 49.6 expected
- What are the main events for today?
- Gold looks poised to close out September in style
- FX option expiries for 23 September 10am New York cut
It's been a pretty slow session with just a few economic reports and limited newsflow. The main highlights were the Flash PMIs for Eurozone and the UK. The Eurozone PMIs were good, especially on the services side. HCOB wrote: "eurozone is still on a growth path. Manufacturing output has increased for the seventh month in a row, and business activity in the services sector has been expanding almost continuously since February 2024."
The UK PMIs, on the other hand, missed expectations across the board and were followed by a more downbeat assessment. S&P Global noted "September’s flash UK PMI survey brought a litany of worrying news including weakening growth, slumping overseas trade, worsening business confidence and further steep job losses. The only good news is perhaps that, just as the Bank of England grows increasingly worried about persistently elevated inflation, the PMI indicated that price pressures have moderated in September."
Lastly, we had BoE's Chief Economist Pill speaking and despite acknowledging the slow pace of disinflation in the UK, he said that he was more comfortable now on balance of inflation risks than 6-12 months ago. Not sure what there is to be comfortable with UK's inflation. Inflation has been much above target since 2021, underlying inflation has been going back up steadily since September 2024 and services inflation has been stuck around 5% for over a year.
In the FX market, the reaction to the PMIs was relatively muted given that the ECB and BoE are now more focused on inflation. Nonetheless, the US dollar remained on the backfoot even though the changes were negligible. The focus remains on the US PMIs today, the US Jobless Claims on Thursday and the Fedspeak throughout the week, including Fed Chair Powell today.
In other markets, US equities are mostly flat and have been trading sideways since yesterday's close. US Treasuries have been consolidating since the last US Jobless Claims report as traders await more data. Bitcoin is ranging above the key $112,000 level after yesterday's selloff. And gold made yet another all-time high reaching the $3,791 level before pulling back a bit.
