The UK construction PMI index dipped to 48.9 for June from 51.6 previously and below consensus forecasts of 51.0 which put the sector into overall contraction. There was the fast decline in residential construction for over three years. Overall input prices declined for the first time since 2010 and there was a marginal decline in sub-contractor prices for the first time in 31 months. UK Treasuries came under further strong selling pressure during Thursday with yields continuing to move higher with the 2-year yield at 15-year highs. Higher yields helped cushion the Pound to some extent, although there was a negative impact from the slide in UK equities to an 8-month low which limited the potential positive impact
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German data recorded an unexpected surge in factory orders of 6.4% for May after a revised 0.2% increase previously and compared with expectations of a 1.2% increase. The release provided an element of relief, but underlying concerns persisted and industrial production edged lower.
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The US ADP data reported a surge in private payrolls of 497,000 for June compared with expectations of around 225,000 and following a revised 267,000 increase the previous month. There was, however, a significant retreat in manufacturing jobs for the month. The ADP reported that annual wages growth slowed to 6.4% for the month from 6.6% previously. The headline figure jolted market expectations with sharp moves across asset classes.
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