UK construction PMI was released at 55.3 compared to 46.0 which was predicted by the market, although the Pound lost some ground against both the Euro and the Dollar. In response to the UK offering a path to citizenship for up to 3 million Hong Kong residents, China has warned the UK against getting involved calling it ‘gross interference’. Chancellor Sunak is expected to make a speech tomorrow with further measures to help stimulate the economy which will include £3bn dedicated to cut carbon emissions which is predicted to help support over 100,000 jobs.
Yesterday, German factory orders data came out worse than expected. However, the market chose to focus on Eurozone retail sales which beat the market’s expectations coming out at 17.8% compared to the forecasted figure of 15.0% leading to the Euro strengthening against both the Pound and the Dollar. This morning, German industrial production disappointed the market with a release of 7.8%. As a result, the Euro has struggled to make any further gains so far. The Ifo institute has said that German firms in the industrial sector do foresee a rise in production over the next few months.
Both US final services PMI and ISM non-manufacturing PMI releases were better than expected yesterday afternoon which gave the Dollar some support. However, the market remains hopeful of a V-shaped recovery despite the rising number of new coronavirus cases worldwide which gave the greenback some bouts of weakness leading to the Dollar trading in a range all day. Over 40 business groups in the US have sent a letter to urge China to purchase more US-made goods and other products after concerns have risen that China may not be purchasing to the same level agreed in the phase one trade agreement.