This morning sees the results of the third and final industry survey released, with the UK services PMI due out at 9:30am GMT. Going into the economic release the pound is little changed on the day after yesterday’s sizeable declines, whilst the FTSE 100 is higher by 12 points.
Economic data to drive markets into the weekend
There are two major economic releases today from either side of the Atlantic which could dictate the market’s direction into the weekend. First up, we have the UK services PMI which is expected to show another strong reading after a print of 56.2 seen previously - this was the highest reading since August 2015. Consensus estimates believe there will be a slight drop to 55.8 but this would still mark a solid data point and show strength in the UK’s largest industry sector. The readings in the last two days for manufacturing and construction have shown contrasting pictures with the former surpassing expectations whilst the latter disappointed. However the services equivalent carries more weight and after yesterday’s softening in the pound a strong figure could come to its aid. Having said that, expectations are lofty and if we get a disappointment we could see the pound come under pressure into the end of the week.
First US employment report under Trump
This afternoon sees the US non-farm employment report released at 1:30pm GMT in what is commonly one of the biggest market moving events of the month. Expectations are for around 170k jobs to have been added in January after a reading of 156k previously. Despite this data release historically being volatile and often including large revisions to prior prints, the last five have been remarkably consistent and in the 150k-180k range. Another figure in this region would support the idea that the US jobs market remains robust but there are some suggestions we could be in store for a stronger print. Wednesday’s ADP release - a private equivalent of the government’s data that is released today - is often seen as a precursor to the NFP and this smashed expectations of 165k jobs to have been added, coming in at 246k. In addition the ISM manufacturing release this week showed a significant beat on the employment subindex so there is plenty to suggest we could be in for a strong reading later. US President Donald Trump remains a potentially key driving force on the markets with just a single tweet having the ability to wipe millions of dollars off certain stocks. Although Mr. Trump hasn’t let a lack of knowledge or understanding stop him from offering an opinion on several topics, since taking office he has refrained from commenting on economic data. If today’s data is strong, as some suggest it may be, then will Mr. Trump attempt to step forward and take the credit or will he refrain from comment? The president receives the jobs data prior to the official release and there is the possibility that he will be unable to refrain himself from firing out his customary early morning tweet, particularly if the figures are impressive. Previously this is unheard of and the idea of a president releasing economic data early would be dismissed as highly unlikely, but with Mr. Trump you just never know.