The UK construction PMI index declined to 58.0 for April from 59.1 previously, although this was marginally above consensus forecasts. There was the slowest rate of growth in new orders for 2022 with growth projections at the lowest level since September 2020 while there was further strong upward pressure on cost and prices. Bank of England chief economist Pill confirmed that two members did not sign up to the BoE’s guidance as they considered that enough may have already been done. He added that the bank should not over-respond to short-term developments or be over-aggressive with policy moves. CFTC data recorded a further net increase in short Sterling positions to near 74,000 contracts and the largest short position since October 2019. The Northern Ireland assembly election results confirmed that Sinn Fen would be the largest party which reinforced constitutional and Brexit concerns.
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There was generally hawkish rhetoric from ECB officials during Friday. Council member Villeroy stated that it was reasonable to raise rates into positive territory by year-end. Bundesbank head Nagel said that the window for taking monetary policy action is slowly closing and market expectations of a July increase intensified. CFTC data finally signalled a move back to a short Euro position for the first time since early January at close to 6,500 contracts
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US non-farm payrolls increased 428,000 for April which was the same increase as reported for the revised March data and slightly above consensus forecasts of 395,000. Manufacturing payrolls increased 55,000 on the month and there were net increases across all major job sectors. The unemployment rate held at 3.6% for the month and slightly above market expectations of 3.5%. There was a decline in the participation rate for the month and the household survey recorded an employment decline of over 350,000 on the month which will cause some unease within the Federal Reserve amid concerns over a lack of labour supply. Average hourly earnings increased 0.3% on the month, slightly with a year-on-year increase of 5.5% from 5.6% previously.
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