GBP

Sterling remains steady in early trading ahead of the monthly purchasing managers index (PMI) for the manufacturing industry due for release later this morning. Overnight the nationwide house prices survey showed an increase of 2.1% month on month against the expected 0.2% rise. House prices in the UK are now 13% higher than when the pandemic began. An increase in covid cases and Brexit news could act as a headwind for the pound. Official figures released on Tuesday showed another 32,181 positive tests and former DUP leader warned the UK government to take action to deal with the harm which the Northern Ireland protocol is doing to the UK’s internal market “before irreparable damage is done”.

EUR

German retail sales fell by far more than expected in July after two months of sharp increases, figures released by the Federal Statics Office (FSO) showed on Wednesday. This is the first sign that the consumer driven recovery in Europe’s largest economy might be losing some impetus in the third quarter. European Central Bank vice president Luis de Guindos has reiterated fellow policymakers recent comments that inflation is expected to pick up in 2021 before falling back in 2022.

USD

The dollar index which measures the greenback against six major peers, rose slightly on Wednesday after falling to its lowest level in 3 weeks on Tuesday. The dollar falls came after the consumer confidence index dropped to 113.8 in August from a previous 125.1. This marked the index’s lowest level since February with growing concerns about the delta variant being cited. ADP, America’s largest payrolls provider, publishes its report for private sector employment later today. The ADP report along with the release of the PMI survey for the manufacturing industry will be closely scrutinised by traders.

Economic Calendar

9.30 am UK Manufacturing PMI
1.15 pm US ADP Employment report
3.00 pm US Manufacturing PMI