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Confidence is all you need

A slew of key industry data from the Eurozone, the UK and the US will shed light on the health of their economies.

Centtrip: Confidence is all you need, German PMI

The week kicks off with a slew of key industry data, including Purchasing Managers’ Indices (PMIs) from the Eurozone, the UK and the US. PMI is a leading indicator of health within an industry and of the state of an economy. A number below 50 shows contraction.

Monday, 4 November

08:55 (GMT) – German manufacturing PMI – Previous: 41.7; Forecast: 41.9

09:00 – Eurozone manufacturing PMI – Previous: 45.7; Forecast: 45.7

The Euro could come under pressure if the manufacturing sector in Germany, Europe’s largest factory and big driver of economic growth across the bloc, misses expectations. In addition , with the US-Chinese trade war and Brexit far from resolution, the negative number could take further toll on confidence levels in Germany and Europe.

Tuesday, 5 November

09:30 – UK services PMI – Previous: 49.5; Forecast: 50

The services sector in the UK makes up more than 70 per cent of the economy and is a key driver of employment and GDP growth. Of late, the sector has been battered by Brexit uncertainty, but it has been forecast to improve to 50, suggesting confidence sentiment turned neutral.

The concern is that a glimpse of hope that a Brexit deal could be signed off has been put into jeopardy as a general election could cause further stalemate and more uncertainty. Signs this could be having a knock-on effect to UK Plc could weigh on the Pound, which has had a boost from the news of December general election.

15:00 – US non-manufacturing PMI – Previous: 52.6; Forecast: 53.2

The US non-manufacturing sector is forecast to show a slight improvement from 52.6 to 53.2. However, it tends to be combined with the manufacturing number, and the one released on Friday, 1 November showed that despite improving from 47.8 in September to 48.3 in October, it missed the forecast of 48.9.

If the non-manufacturing release also misses expectations, it will raises concerns over GDP growth in the final quarter of 2019 and cause consternation in the Dollar, especially after the Federal Reserve tried to stimulate the economy in the form of three interest rate cuts since July.

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