Nationwide reported a 0.9% increase in UK house prices for November with the annual increase at 10.0% from 9.9% previously. The UK manufacturing PMI index was revised marginally lower to 58.1 from the flash reading of 58.2 as supply-side issues remained a key element. Sterling gained an element of support from stronger global risk conditions, although there was little evidence of momentum with underlying caution still a key element. Markets remained uneasy over developments surrounding the Omicron variant, especially given the importance of the UK as a travel hub. There were also further doubts whether the Bank of England would push ahead with a near-term interest rate hike given elevated uncertainty. Sterling retreated as the dollar regained ground. Sterling was unable to make headway on Thursday with reports that the US was delaying a trade deal with the UK due to Brexit concerns also hampering sentiment.
No Key Data
German retail sales fell 0.3% in October with a 2.9% annual decline. The final Eurozone manufacturing PMI index edged lower to 57.4 from the flash figure of 57.6. There were still reservations surrounding the Omicron variant, although Eurogroup head Donohoe was confident that the region’s recovery would be sustained. Ahead of the New York open there were reports that the ECB would decide against making major decisions at the December policy meeting. Although the PEPP bond buying is still expected to finish in March, the central bank may not be in a position to calibrate medium-term policy given uncertainty over the Omicron variant.
Key Data
10.00 Unemployment Rate (Oct) Exp. 7.3% Prev. 7.4%
The US ADP employment report recorded an increase in private-sector payrolls of 534,000 for November from 570,000 the previous month and slightly above consensus forecasts of 525,000. The data suggested a robust labour market but added little to the overall economic debate. The ISM manufacturing index edged higher to 61.1 for November from 60.8 the previous month and close to consensus forecasts. New orders and production also increased at a slightly faster rate on the month while employment rose at a faster rate. There were still important supply difficulties and further lending of delivery times, although the rate of deterioration eased slightly. There was also a slight easing of upward pressure on prices during the month. Fed Chair Powell stated that demand in the US economy is very robust as a result of fiscal stimulus and the rapid recovery and he also stated that the risks of higher inflation had increased. Powell did note that he expected inflation to decline significantly in the second half of next year, but also admitted that there was a high degree of uncertainty. Cleveland Fed President Mester stated that a quicker taper gives the Fed room to hike rates earlier if needed.
No Key Data