The pound is falling across the board this morning after the release of a plethora of disappointing economic data. The FTSE 100 is little changed on the day but on course for a second weekly decline in the past 3 weeks.
Latest UK data disappoints
On the whole it has been a bad week of economic data from the UK with the vast majority missing consensus forecasts. This morning saw a second successive decline in both manufacturing and industrial production month-on-month, whilst construction output had its largest monthly decline since July last year. After surveys of purchasing managers in the manufacturing and construction sector showed less confidence going forward than expected Wednesday’s services equivalent went some way to allaying fears of a slowdown in economic activity. The services sector is the largest of the three and therefore holds the greatest weight in judging the overall economy but given the latest releases, on balance, it’s been a bad week on the data front. Having said that, the prints aren’t poor enough to give too great a cause for concern, but they do serve as a timely reminder that with the clouds of Brexit overhead, any over exuberance regarding the economy should be kept in check. There remains a high level of uncertainty for almost all aspects of business with the imminent departure from the EU and if the economy can continue at current pace throughout the next two years of negotiations, that in itself should be warmly welcomed as a success.
US strike Syrian air base
There were some notable moves in safe haven assets overnight following news that the US had attacked the Shayrat airfield in Syria with 59 Tomahawk cruise missiles. Gold futures popped higher by around 1% to trade at their 2017 peak and in doing so broke above some key technical resistance. This effect can be seen on stocks in London with Randgold Resources (LON:RRS) and Fresnillo (LON:FRES) the two best performing shares on the FTSE 100. The monthly US jobs report is set to be released shortly after lunchtime and any disappointment could bring more joy for gold bugs who have seen a 10% rise year-to-date. Stock futures showed some weakness around the time of the strike shortly after 2AM GMT but they recovered somewhat by the time of the European open. Mining stocks occupy the four spots at the foot of the index with Rio Tinto (LON:RIO) the worst hit and down by 1.80%. BT is also under pressure with the telecommunications firm adding to recent declines and trading not far from its lowest level of the past year.