Little attention was paid to the UK manufacturing PMI this Thursday, with the FTSE and pound by and large maintaining the positions held in the early moments of the session.
Sterling must be in a pretty good mood to ignore the morning’s manufacturing reading, which revealed a sharp and unexpected drop, from 56.2 in December to a 7 month low of 55.3 in January. That’s not a disastrous number by any means – however, once again the UK quite notably trailed the eurozone, which managed a 59.6 reading for the first month of 2018, 1.0 off December’s all-time high.
Still, as mentioned, the pound was nonplussed by the decline, focusing on the positives to hold onto a half a percent climb against the dollar – it’s basically now recovered all of last week’s losses – and 0.3% increase against the euro. This left the FTSE with an almost meaningless 10 point rise, a move that barely lifts the UK index off the 2018 lows struck on Wednesday.
As for the eurozone, the strength of the region-wide manufacturing PMI, combined with the euro’s gains against the dollar being tempered by the single currency’s pound-decline, made for a decent showing from the German and French indices. The DAX rose 0.3%, while the CAC stretched its legs back across 5500 after jumping 0.5%.
Looking ahead to the US open and the Dow Jones appears to have been a tad more bothered about the Fed’s hawkish hold than the dollar, with the futures pointing to a 35 dip after the bell. The Markit and ISM manufacturing PMIs could change that, however; the former is forecast to rise from 55.1 to 55.0 month-on-month, while the latter is expected to slip from 59.7 to a still strong 58.7.
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