Friday, 2nd June: Once again, UK data releases this morning is where we begin. UK Construction PMIs jumped to 56 from 53.1 in April, resulting in the highest level since December 2015. The report also showed builders hired more workers, ordering more supplies to manage the faster inflow of new projects; following a similar trend from the manufacturing report yesterday. The strong figure, just like yesterday’s manufacturing data, reveals a strong turn-around following a weaker first quarter. Although these two sectors showing further expansion in 2017, eyes will turn to the larger services sector data release on Monday, which is more exposed to slowing consumer spending, as UK households get used to rising inflation.
Over in the US, eyes turned to the latest non-farm payrolls numbers, where hiring slowed but unemployment fell to the lowest level in 16 years. Non-farm payrolls rose by 138,000 in May, lower than the 184,000 expected. However, the jobless rate fell to 4.3%, the lowest since May 2001, indicating the jobs market is at, or at least very near, full employment. Attention often turns to the Federal Reserve post jobs numbers, but it seems the weak number won’t dissuade Fed officials voting for rate hike at the upcoming June 14th meeting. Current expectations are c.88% for a 4th rate rise in this cycle.
For travellers who were caught up in BA’s IT malfunction, the last May Bank Holiday weekend would be one they want to forget. However, reclaiming incurred expenses from the delayed travel may not be as easy as hoped. It seems the BA website is suggesting customers affected should contact their travel insurers’ to reclaim additional costs for meals during the delays. However, the Association of British Insurers, as well as a consumer rights expert say the responsibility should lie with the airline. 75,000 passengers were left without a flight as an IT failure grounded flights from Heathrow and Gatwick.
Last night US President announced his plans to withdraw the US from the Paris Climate agreement. The accord is designed to cut future temperature increases for the planet, and Trump has claimed withdrawing the US will hurt American economic growth. However, as ever the one to keep himself in the headlines, Trump has also said he will start talks to re-enter the accord, with a more “fair” deal. Technically, the US can’t be withdrawn until November 2019, and even then, they must give a year’s notice. Brent Oil is back below $50/bbl through a combination of the US’ “withdrawal”, alongside rising production in the US.
At the close, London indices closed relatively flat. GBP/USD was also relatively flat at $1.2888, but GBP/EUR was -0.5% at €1.1436. The Dow Jones and S&P 500 are both trading higher at the time of writing.