The morning has seen the most widely-viewed manufacturing data for the UK economy signal continued strength and is supportive of GDP growth for the final quarter of the year. The news has seen little by the way of market reaction thus far with the FTSE 100 and GBPUSD relatively flat on the day.
Second highest manufacturing print in more than two years
This morning’s release of the UK manufacturing PMI showed a small fall on last month’s data, but nonetheless is still the second strongest number seen in the past 27 months. The figure will likely be used by Brexit-backers to further support their claims that the UK economy is performing well since the EU referendum, as purchasing managers seemingly feel upbeat about future prospects. However, amongst those surveyed approximately 90% mentioned the sterling exchange rate in their responses with the pound plummeting during the last month. Before supporters of the Brexit get too carried away, it should be noted that this fall in the currency is largely responsible for the strength of the print with UK goods exports surging in recent months as a result of the weak pound. In addition, due to the sterling depreciation the sector as a whole saw the fourth largest rise in raw material costs since indicator began in 1992 in a development which suggests that upward inflationary pressures are building.
Shell (LON:RDSa) shares rise after earnings beat
The best performing stock on the FTSE 100 this morning is Royal Dutch Shell, with the firm reporting a $2.8bn underlying profit for the third-quarter of the year which was above analysts’ estimates and seen the stock rise by over 3.5%. The timing of the release comes just a day after the largest fall in the oil price in over a month and in an indication of the ongoing difficulties in the sector, BP (LON:BP) languishes near the bottom of the index and trades lower than 2% on the day after reporting a near 50% drop in its profits for the same period. Thanks in part to the manufacturing release just over an hour ago, the index has just now ticked into positive territory with mining stocks amongst the best performers after Chinese manufacturing data overnight came in better than expected. Fresnillo (LON:FRES), Antofagasta (LON:ANTO) and Anglo American (LON:AAL) are all sitting on decent gains at the time of writing.