European markets have open higher today ahead of that latest US employment report which is due out later this afternoon, boosted in some part by another set of fairly resilient services PMI data, from German, France, Italy and Spain.
The pound took another tumble after the latest services PMI for January slipped back more than had been expected, though once again cost inflationary pressures showed no signs of abating, causing firms to also praise prices. This makes the Bank of England decision to keep its inflation forecast unchanged all the more curious.
UK Prime Minister Theresa May also lands in Malta today at the latest EU summit to discuss her recent meeting with Donald Trump, where she will also urge EU leaders to show their commitment to NATO and increase their defence spending to 2% of GDP. If EU leaders are smart they will try and use the UK as a bridge to a new US administration who at best have a fairly ambivalent view of the EU as an organisation.
The mining sector has slipped back this morning after a disappointing Chinese manufacturing survey as well as slight tightening of money market rates by Chinese authorities. It’s not immediately clear what prompted this action, though there is speculation about rising concerns about a property bubble, and this slight rise could well be an attempt to warn that tighter policy is on the way. Glencore (LON:GLEN), Antofagasta (LON:ANTO), BHP Billiton (LON:BLT), Anglo-American PLC and Rio Tinto (LON:RIO) have all slipped lower at the open.
On the upside banking shares have gained a lift on speculation that US President Trump may well sign a new executive order to roll back some of the Dodd Frank regulatory bill, helping push Barclays (LON:BARC) and RBS (LON:RBS) higher.
The main focus today will be on the US employment data, with the latest January non-farm payrolls and unemployment report due at 13.30 GMT. We’re expecting to see an increase of 175k jobs, though it wouldn’t be a surprise to see a stronger number after this week’s bumper ADP employment number, along with a decent manufacturing ISM report which suggests that despite the noise being created by the early days of the Trump presidency, the economy continues to look fairly healthy.
The Dow Jones is expected to open up by 23 points at 19907.
The S&P is expected to open up by 1 point at 2281.
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